Independent Gambling Authority, $1,849,000

Department of Treasury and Finance, $70,268,000

Administered Items for the Department of Treasury and Finance, $1,752,379,000

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:

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

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

Mr D. Corcoran, Manager, Financial Services, Attorney-General's Department.

Mr D. Soulio, Commissioner, Consumer and Business Services.

Mr J. Bonnici, Manager, Corporate Services, Consumer and Business Services.

The CHAIR: The Attorney-General's Department lines are still open. I declare the payments open for examination and refer members to Agency Statements, Volumes 1 and 4. We are talking about Consumer and Business Services, by agreement.

The Hon. J.R. RAU: First, some introductions: immediately to my right is Ingrid Haythorpe, the Chief Executive of the Attorney-General's Department, who is still here. Immediately to my left is somebody you may have understood to have been the Acting Chief Executive of SafeWork SA, but you are now wrong, because he is in fact the Commissioner for Consumer and Business Services—yet another of Mr Soulio's roles. Next to him is Mr Swanson, who has made various appearances, sometimes sitting behind us, but is here as Executive Director of Finance and Business Services, and he is the guy who understands money things.

The CHAIR: Any opening statement, minister?

The Hon. J.R. RAU: Only that it is good to be with you.

The CHAIR: Thank you. The member for Schubert.

Mr KNOLL: I refer to Budget Paper 4, Volume 1, page 31. In relation to the Consumer and Business Services role with gambling and the Casino—and we have actually been sent here by the Treasurer, so I think he has stuck CBS in it, to a degree.

The Hon. J.R. RAU: This could be interesting. Oh dear! He's got a sense of humour, hasn't he? You know he is playing with you, don't you?

Mr KNOLL: If you can call it such. Is there any contemplation of change to gambling taxation rates, especially as they apply to the Casino?

The Hon. J.R. RAU: I have to say that the Treasurer is a bit of a card. He has actually sent you off on a wild goose chase. If he is still around the place, you ought to grab him and say, 'That was terrifically funny,' but you will wake up to him, because everything to do with tax is him not me. So I have no role.

Mr KNOLL: Okay, let's move on then. Have you had any role in relation to the negotiation of any arrangements offered to the Casino in regard to securing this development? Can I ask the minister in a slightly different way? Who is signing any sort of deed of arrangement or deed of understanding in relation to taxation arrangements with regard to any deal that is done with SKYCITY Casino?

The Hon. J.R. RAU: As to your last question, I was going to say that if it was possible to get a crayon and write on a very large piece of paper 'No' in red, I would have done that. As to the second question, I am not sure whether any particular document needs to be executed, but again, if it is relating to taxation, that is within the scope of the Treasurer's role.

Mr KNOLL: As it relates to Renewal SA there would be some sort of arrangement?

The Hon. J.R. RAU: No. I assume that when you are talking about tax—

Mr KNOLL: It may not be tax, it may also just be a standard—

The Hon. J.R. RAU: What happens with gaming is that there are some differences in the gaming machine treatment for the Casino and other gaming machine operators. For example, they are allowed to trade at different times. There are also longstanding matters relating to the taxation rates applicable to aspects of the gaming activities of the Casino that are unique to the Casino.

What I am trying to say in answer to your question is that the negotiation between the Casino and government in respect of those rates of taxation is a discussion with the Treasury, and is ultimately a matter for which the Treasurer is responsible. I can also say that I understand from the Commissioner for Consumer and Business Services that it is his belief that there has been no change in arrangements as far as tax is concerned in recent times. The Treasury is the home port for those questions.

Mr KNOLL: Let's move on to Budget Paper 4, Volume 1, page 31, Employee benefits and expenses. I think we have answered a few of the questions here, that the Commissioner for Consumer and Business Affairs is still the acting director of SafeWork SA. I think that we understand that to be correct. Is the Commissioner for Consumer and Business Affairs also the acting general manager of the Independent Gambling Authority?

The Hon. J.R. RAU: No. Even he has his limits.

Mr KNOLL: Okay. Are those the only two roles that the commissioner holds?

Mr SOULIO: Yes.

Mr KNOLL: In terms of where the money comes from to ask you to do these various roles, is there a separate payment for the conducting of those two roles?

Mr SOULIO: When you say 'separate payment'?

Mr KNOLL: So, obviously you get paid to be the acting director of SafeWork SA.

The Hon. J.R. RAU: You get paid twice! It is a bloody good idea!

Mr SOULIO: I think it is a great idea. If I got both pay packets, I would be a very happy man. No, the situation is my pay is split between the two.

Mr KNOLL: When you took on the acting director role of SafeWork SA, there was no pay bump for you?

Mr SOULIO: I think there was an allowance of $20,000 or something.

Mr KNOLL: It sounds like they got the good end of the deal.

Mr SOULIO: I agree.

Mr KNOLL: Can I ask why was Mr Robert Chappell on leave between September 2016 and May 2017?

The Hon. J.R. RAU: I am aware that Mr Chappell was absent from the workplace from some point in time from September 2016 and that his employment was terminated in May 2017. That was done pursuant to the act and his contract of executive appointment.

Mr KNOLL: Was he receiving payments for services during that time?

The Hon. J.R. RAU: I believe he did.

Mr KNOLL: Do you have any understanding of how much those payments for that period would have been?

The Hon. J.R. RAU: No, but I can find out.

Mr KNOLL: Did Mr Chappell receive any termination payment at the conclusion of this contract?

The Hon. J.R. RAU: Again, I will find out.

Mr KNOLL: Would Mr Chappell have been under the standard arrangement with regard to the giving of notice and/or notice in lieu depending on when his contract finished?

The Hon. J.R. RAU: I believe so, yes.

Mr KNOLL: Was any complaint received in respect of Mr Chappell's performance in his role, and was there any investigation into his performance?

The Hon. J.R. RAU: I need to take some advice about what I should be saying about that, because I am not sure of all of the circumstances. Can I take that on notice?

Mr KNOLL: Sure. Have any matters been referred to police in relation to his performance?

The Hon. J.R. RAU: Again, can I take that on notice? That is not meant to mean anything other than I just do not know and I want to be sure I know.

Mr KNOLL: Does the government propose to replace Mr Chappell?

The Hon. J.R. RAU: We have got somebody acting presently, who is Jeanette Barnes. Yes, ultimately that role will be, I guess, filled. You are not applying for that too, are you, Mr Soulio? You would be regulating yourself.

Mr SOULIO: I would be. That is the problem.

The Hon. J.R. RAU: Anyway, it will have to be filled. There are reasons that I have been thinking about this as well, because it may or may not be—and I am not going to put it any higher than that—that this is an appropriate moment in time to consider whether the current configuration of the IGA is appropriate. It might be that it is, in which case it is simply a matter of replacing Mr Chappell and moving on or it might be that it is not. This gives us an opportunity to at least consider whether something different would be better.

Mr KNOLL: I think that is pre-empting my next question. Has the government decided what action, if any, it is going to take with respect to Tim Anderson's review of the gaming industry?

The Hon. J.R. RAU: One of the matters that Mr Anderson raised in that was obviously a question of this whole governance and how it was dealt with. If I can summarise the point, it is basically this: there is a bit of an overlap between the regulator on the one hand and the policymaker on the other in the present set-up, and at least from an abstract theoretical point of view there is something to be said for having those two functions not reposed in the same place. Whether or not that ultimately is such a strong argument that it warrants whatever changes are necessary is another matter.

There is also stuff going on at a national level which may impact on how that framework best looks. So, yes, Mr Anderson did raise questions that might be considered by government about how best to manage the idea of policy and regulator, but there is other stuff going on around the commonwealth as well.

Mr KNOLL: You have had the review for a number of months.

The Hon. J.R. RAU: Yes.

Mr KNOLL: Do you have a time frame on when any bill would be brought before the parliament, given I think we have six or seven—and you know how this chamber likes to take its time.

The Hon. J.R. RAU: Yes, I do. I am in the process of working my way through that. To put it on the table, Mr Anderson's interest in the gambling business came up coincidently through his liquor review activities because many of the people he was talking to also had a gaming function. He already bumped into, if you like, the gaming issue by virtue of his liquor inquiry. Part of what he was looking at was whether or not we could see any way of rationalising the gaming industry in South Australia.

I think it is fair to say that there was a moment in time in about 2013, or thereabouts, when it would have been possible for some rationalisation to occur because there was a chance then, which was actually brought to the parliament, of us having a major and minor venue split where the major venues would accept that they could have up to 60 machines, but in doing so they would embrace voluntarily a whole bunch of other harm minimisation stuff, which was not mandated elsewhere but they would voluntarily do that in exchange for getting 60 machines.

In the process, there would be other venues which would be minor venues and they would be able to have less flexibility and it was thought that that would provoke a trading round where some people would sell down and some would buy up. When that came to the parliament, the former member for Davenport became very enamoured of the club industry and they lobbied very hard for this not to occur and in the process they basically destroyed any consensus that might have been there for the thing. So, that time passed.

I have since taken the temperature of some people around the place, being the clubs, the hotels association and whatnot, 'Look, if a similar deal were on offer now, are you interested?' Because at that point the hotels, for example, were okay with this and they thought it was a sensible rationalisation process. The feedback that I have had from them is, 'Not anymore.' Realistically, I cannot see that sort of rationalisation of the actual gaming business, so that we stimulate trading and therefore stimulate a reduction in machines through that mechanism; I cannot see us having any answer to that any time soon.

Mr KNOLL: Do you expect a bigger bill before parliament prorogues?

The Hon. J.R. RAU: I may do, but I guess what I am telling you is that I think it is extremely unlikely, if I do, that it is going to say anything about that sort of accelerated trading-type incentive. It will be more focused on some of this regulatory stuff, which is probably reasonably dry from the perspective of most observers of this industry.

Mr KNOLL: If I could move on to Budget Paper 4, Volume 1, page 31, in relation to liquor licensing annual fee payments. I understand that there have been a number of issues in relation to incorrect reference numbers being given to liquor licence holders and there being an inability for them to be able to pay their fees online through BPAY.

The Hon. J.R. RAU: If that is true, that is obviously not good. I am advised by the commissioner that it was an IT problem, which did make things difficult. He assures me that has now been addressed.

Mr KNOLL: Is there an understanding of the number of licences that have been incorrectly issued? Are there going to be any late fees charged as a result of any mix up with this?

Mr SOULIO: I will have to take that on notice. If there is anything that has been a result of either a technological problem or a human error issue, there certainly will not be fees imposed on those licences, but I will find out the number of people affected.

The Hon. J.R. RAU: The attitude that the commissioner has always expressed to me is, 'Fess up when you mess up' and 'Don't visit your mistakes on the public.' That is what you always say, is it not?

Mr SOULIO: It is.

Mr KNOLL: Still on the issue of liquor licensing fees, what is the annual revenue from small bar licences in 2016-17, and what is that amount expected to be in 2017-18?

The Hon. J.R. RAU: I think I would have to go to the commissioner, but the small venue licence revenue in 2016-17 is projected for the forthcoming year. We will have to get it. What I can tell the member for Schubert is that when that licence was introduced, over the objection, I might say, of certain—

Mr KNOLL: Were there zero fees before the licence category was created?

The Hon. J.R. RAU: It was my anticipation that over the next 12 months or so we might get six of these things in the city. We now have nearly 100—we are about to hit 100. What this has done to the vitality of the city and the diversity of offerings in the city is fantastic. It really has completely changed the drinking culture in the city, which was something I was very keen to see.

I think the member for Schubert, indirectly, should be very pleased about this because these soon to be 100 venues are much more likely to have the excellent product that comes from his electorate in them, than they are to have—

Mr KNOLL: I am not sure that is entirely true.

The Hon. J.R. RAU: Not all of them, I know.

Mr KNOLL: Anyway, we will leave that there, but I actually tried to investigate that very fact.

The Hon. J.R. RAU: I think you should and, by the way, you need to visit nearly 100 now to investigate that.

Mr KNOLL: I do not think my liver can cope.

The Hon. J.R. RAU: I am prepared to come with you on a couple of those visits.

Mr KNOLL: Given the fact that the 2017-18 financial year has started and the liquor licensing bill is still a bill in the upper house, is it envisaged that, after the bill passes—and I assume that will happen sometime soon—

The Hon. J.R. RAU: We really hope so.

Mr KNOLL: —there will be any change to any licence fee structures for this financial year?

The Hon. J.R. RAU: No, not for this financial year. We have given an undertaking to the industry that, when the bill goes through, we will consult with them about the licence fee structure.

Mr KNOLL: So, that consultation will occur after the bill has become—

The Hon. J.R. RAU: Yes, but what we had as a draft set of fees was basically the regime that was suggested by Mr Anderson in his report. We have made it clear that we are prepared to talk to the industry about how that actually tumbles out.

For what it is worth, my perspective on this is that we have some venues which present minimal risk to the public and consume minimal time from the perspective of the regulator. We have other venues which are regularly the subject of reports on the evening news or visitations by the police that are regularly identified with unacceptable social activities.

All I am trying to do is have a licensing regime that recognises some venues are basically good citizens and some venues are pushing the edges as hard as they can to get away with as much as they can to make as much as they can while they can. I do not think there is anything unreasonable about recognising what they are doing with their licence as part of their licensing fee, including the fact that the team of agents the commissioner has in the field are being unduly preoccupied by dealing with non-performing people.

It is all very well to say, 'Well, why don't you deal with that by licence conditions?', but if you think there is a scream about higher licensing fees just imagine what it would be like when the commissioner turns up to one of those venues and gives them the good news about 10 o'clock closing, because he has decided to unilaterally vary their licence, or when he says, 'From now on you can only drink soda water,' or whatever it is that he decides—

Mr KNOLL: Tom Playford would be proud.

The Hon. J.R. RAU: And not a bad thing in some respects, some would say. The commissioner is not a wowser; he is a terrific fellow who wants people to have a safe, good time in our city.

Mr KNOLL: So consultation will begin after the bill passes?

The Hon. J.R. RAU: It will.

Mr KNOLL: What was the total fee paid by the Royal Adelaide Club for their event The Royal Croquet Club in 2017?

The Hon. J.R. RAU: We will get that information.

Mr KNOLL: Moving on to Budget Paper 4, Volume 1, page 32, Targets 2017-18 and the highlights in relation to digital licences—

The Hon. J.R. RAU: This is the way of the future.

Mr KNOLL: It is the way of the present, actually.

The Hon. J.R. RAU: Excellent, even better. The future is the present.

Mr KNOLL: What occupational categories will be included in the launch of the digital licences?

Mr SOULIO: There was a pilot that has been run, so there is a number of licence categories that sit with the Department of Transport as far as, I think, boat licences and others. From a CBS point of view, initially we have included land agent licences, and the proposal is to roll it out in relation to the remaining occupational licences we hold.

Mr KNOLL: Do you have an estimated budget or cost of reviewing and updating the online presence of CBS to be able to tap into that front-end? Is that a consistent front-end that others are using for their usual licence platform or does CBS have—

Mr SOULIO: It is a single platform that will be used for that purpose.

Mr KNOLL: Has any money been taken out of the CBS budget to contribute towards setting that up?

Mr SOULIO: No.

Mr KNOLL: When is the transition to online smart forms from manual forms expected to be completed?

Mr SOULIO: Some forms have already been rolled out and others are in the pipeline. Basically we are looking at all our forms at the moment. There has been a significant number, I think, from a liquor point of view—we have rolled 57 forms into about 12 or something—but I can clarify those numbers. We are looking at basically all our forms to deal with our customers in an online environment.

Mr KNOLL: Do know when that will be completed?

Mr SOULIO: I do not have a date for when we are going to finalise all our forms but it is an ongoing arrangement for every form we have that will be reviewed.

Mr KNOLL: Every form, okay. I would like to ask a few questions about occupational licences and enforcement, especially in relation to the building industry. There are licence conditions on each builder in relation to the work they are able to undertake, but in terms of the enforcement or compliance side, how many staff are there to regulate and monitor compliance with licences within the building industry?

Mr SOULIO: The way the enforcement team is set up in CBS is that there are not dedicated individuals in the construction industry. There are certainly some people who have expertise who will get involved in matters, but the enforcement team are cross-skilled to be able to deal with matters as they arise, and that creates some flexibility from my point of view to be able to say, if we are going to hit a particular industry and it is looking at the construction industry as a whole, we may then pull in all the investigators or a number of inspectors to do that piece of work but otherwise there may be investigators or inspectors working on different aspects. In terms of a number we have who are dedicated to construction, we do not have that.

Mr KNOLL: How many overall are there within CBS across the different—

Mr SOULIO: There are about 25 FTE.

Mr KNOLL: And do you have any understanding of how many investigations or random checks are undertaken on an annual basis in relation to the checking of building licences?

Mr SOULIO: I will have to come back to you in relation to some actual numbers.

Mr KNOLL: Are random checks undertaken or is it—

Mr SOULIO: A lot of the work is done across the board. We do random checks in relation to, say, people who are advertising in different aspects of certainly media, in newspapers and things like that, to see if they are licensed. We will do those sorts of things. We will also respond on a complaints basis. We also have other regulators who are out and about—for example, the Office of the Technical Regulator—who go out to sites and will come back to us and say, 'This person has done this work and he's not licensed.' There are a number of avenues for intelligence gathering in relation to potentially unlicensed operators and obviously complaint based as well.

Mr KNOLL: Is every credible complaint investigated?

Mr SOULIO: Obviously, as any regulator, you have finite resources to deal with the matters that come through the door. I think you would find that every regulator in the country will need to prioritise and triage the matters that come through the door, and we have a compliance enforcement policy that will determine what factors we take into account. Ideally, you take on everything but in terms of things like the amount of detriment, the history the operator has, or whether the person they have taken money from is a vulnerable person, there are a number of factors we will take into account.

If it is a one-off and a small matter, there may be an enforcement response that is at the lower end of a warning letter. Some matters we will just keep on file, and if that person pops up again, we will whack them the second time knowing that history. It does depend, but I do not think any regulator can say that everything that comes through the door is fully investigated.

Mr KNOLL: For the 2016-17 financial year, do you have any visibility of how many licences for instance you would have revoked, for people who were operating outside their scope?

Mr SOULIO: I will have to come back to you with a number on that. I do not have it off the top of my head.

Mr KNOLL: I assume there are various criminal proceedings you can undertake. Do you have any numbers of convictions either that you have progressed or that have been completed?

Mr SOULIO: Yes, I do. In 2016-17, there are 11 successful prosecutions. There are 22 matters that are still subject to court action—

Mr KNOLL: Is that just building licences?

Mr SOULIO: No, that is across the board. If you are just looking at construction, I am happy to come back to you with a breakdown.

Mr KNOLL: No, I am happy with the macro figures.

Mr SOULIO: Sure. In relation to other enforcement outcomes such as assurances and undertakings, there were eight of those as well and a number of expiations. There is obviously a different response depending on the nature of the offending, but certainly there were 11 prosecutions and 22 matters currently subject to court action.

Mr KNOLL: Revoking a licence is a penalty you can apply?

Mr SOULIO: Yes.

Mr KNOLL: You can withdraw someone's licence?

Mr SOULIO: Yes.

Mr KNOLL: Do you have numbers there for that?

Mr SOULIO: The number I have here for licence cancellations is two for 2016-17.

Mr KNOLL: Do you have any idea whether they were in the construction industry?

Mr SOULIO: From memory, they were construction related. Whether they were builders or plumbers or gas fitters, I am not sure, but I can come back to you with that.

Mr KNOLL: That is okay; it can be broader.

The Hon. J.R. RAU: Can I say that CBS do a number of crackdowns from time to time across the board, and they have their people out in the field. I could talk about older actions like Operation Spandex and Operation Benedict, but there is Operation Twilight, for example, which has been dealing with venues. These are quite good. There are a number of venues—I will not reveal where the agents are out there because they—

Mr KNOLL: This is in relation to liquor licensing, I assume?

The Hon. J.R. RAU: Yes. I do not want to reveal where they are going because that will blow their cover but I can assure you that they are all over the place. I am just reading the—

Mr KNOLL: And this is enforcement against liquor licensing conditions?

Mr SOULIO: Yes, that operation, for example—and we do a number of operations from time to time—is looking at licensed venues and their operations. We spoke earlier, I think before you joined the committee, in relation to the interaction with SafeWork and CBS.

Again, there is particular work being done from an enforcement point of view in the construction industry around: from CBS's point of view, licences and do people hold the appropriate licences; and from a SafeWork point of view, are they maintaining their obligations under the Work Health and Safety Act? So, there are some joint operations that will be coming up from a construction industry point of view. We target, obviously, different areas to address that.

Mr KNOLL: Have you had any input—and this may be a question for the Attorney—since the passage of the declared public precincts bill have you had need to declare any public precincts?

The Hon. J.R. RAU: Not yet. I have spoken to the Commissioner of Police about this as recently as a couple of weeks ago and I said to him, 'We've got all this apparatus ready to go. What's going on?' He indicated to me that he felt there was a need for officers to be trained. He was worried because he did not want this thing to be done and not done properly. I, somewhat reluctantly, accepted his assurance that that was the best way to go forward. I take his point; it is just that I would prefer that it was happening sooner. My expectation is, though, that it will be operating by Christmas.

Mr KNOLL: Have there been places earmarked to be declared—

The Hon. J.R. RAU: Not yet. My expectation is that the commissioner, who has a whole bunch of information of his own about where things happen in the city—

Mr KNOLL: The Commissioner of Police?

The Hon. J.R. RAU: Yes—will speak to this commissioner and they will, I guess, trade war stories about where things are going on. My expectation is that out of all of that there will be a series of hotspots identified. I do not think I am going to let the cat out of the bag here by saying that I have a guess that—

Mr KNOLL: Hindley Street.

The Hon. J.R. RAU: —Hindley Street might be amongst them.

Mr KNOLL: It has been mentioned publicly before, yes. It is okay; you are not revealing anything.

The Hon. J.R. RAU: But that may not be the end of it.

The CHAIR: With that I want to thank you, Attorney, and thank all your advisers for their time today and all their hard work, and members of the committee. I declare that the examination of proposed payments to the Attorney-General's Department, administered items for the Attorney-General's Department and the Independent Gambling Authority be completed, and the examination for the proposed payments to the Department of Treasury and Finance and administered items for the Department of Treasury and Finance be referred to committee A.

At 17:18 the committee adjourned to Thursday 27 July 2017 at 09:00.