Department of Primary Industries and Regions, $108,461,000

Administered Items for the Department of Primary Industries and Regions, $4,788,000

Membership:

Mr Griffiths substituted for Mr Williams.

Mr Bell substituted for Mr Treloar.

Mr Pederick substituted for Mr Speirs.

Minister:

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

Departmental Advisers:

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

Mr S. Johinke, Chief Financial Officer, Department of Primary Industries and Regions.

Ms A. Lloydd-Wright, Executive Director, Regions SA, Department of Primary Industries and Regions.

Mr T. Goodes, Deputy Chief Executive, Department of Primary Industries and.

Mr M. Williams, Acting Director, Financial and Prudential Management, Department of Primary Industries and Regions.

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

The CHAIR: Welcome, minister, to Estimates Committee B. You are the last cab off the rank and you are appearing first of all in your capacity as Minister for Regional Development. I declare the proposed payments open for examination. I refer members to the Agency Statements, Volume 4. I now invite the minister to introduce his advisers and then proceed with an opening statement, if he wishes. Sorry, as you are a new minister, I have to read you your rights; I nearly forgot. This is a relatively informal proceeding and, as such, there is no need to stand to ask or answer questions. I understand there has been an agreed approximate time for the payments. Do you still agree to that timetable?

The Hon. G.G. BROCK: Yes.

The CHAIR: Excellent. If the minister undertakes to supply information at a later date or takes it on notice he needs to supply it by Friday 27 October for tabling in the week of 14 November. I propose to allow both the minister and the lead speaker 10 minutes for an opening statement, if they wish. I will be flexible about questions, but each side will get a fair hearing. A member who is not part of the committee may ask a question, at my discretion. The questions must be based on lines of expenditure in the budget papers and they must be identifiable or referenced.

The only material that can be incorporated into Hansard is that which is purely statistical and limited to one page in length. All questions are to be directed to the minister and not to the minister's advisers. However, the minister may refer questions to advisers at any time. I now open the proposed payments and invite the minister to introduce his advisers, please.

The Hon. G.G. BROCK: Thank you, Mr Chair, and good afternoon to you and the committee members, and members of the opposition on my right-hand side. I would like to introduce the members from the department who are with me today. On my immediate left is Scott Ashby, the Chief Executive of PIRSA; next to him is Stephen Johinke, Chief Financial Officer; and on my right is Alison Lloydd-Wright, Executive Director of Regions SA.

Acknowledging the important contribution that regional and remote communities make, the 2017-18 state budget once again highlights the government's continued commitment to supporting regional economic development and growth, and ensuring regional impacts are front of mind in government decision-making.

Over the last three years, and again this year, the government has demonstrated the importance of providing opportunities for regional South Australia through significant investment in service areas, programs and infrastructure. This government is genuine in its intent to engage with regional communities, and together we want to capitalise on opportunities and take advantage of regional innovation to provide for continued regional growth.

One priority area for this government is to make electricity reliable and affordable. The government's energy plan ensures that the heart of our state—our regions—are positioned to benefit from the multiple opportunities that a secure energy supply provides. Addressing our energy reliability is just one example of this government creating the conditions for regional businesses and communities to grow and prosper.

To build on the work undertaken during 2016-17, the 2017-18 state budget highlights the government's continued commitment to regional communities through its significant investment in key service areas, programs and infrastructure for regional South Australia. A key part of the regional development program that my department has continued to deliver is the Regional Development Fund (RDF) grants program. The benefit of this program is demonstrated by the high demand for funding, as the number of applications received and the amount of funding applied for continue to far exceed the available grant funding.

To date, over $60 million in grant funding has been committed from the RDF during this term of government, including $30.8 million during 2016-17. This has supported more than 90 regional economic development projects. The projects supported through the RDF create jobs in regional South Australia, but they do more than that. They also attract international investment into the regions, support the growth of our tourism industry and contribute to our state's economic priority of premium food and wine.

Given that more than 90 projects have received funding from the RDF in just three years, it is not surprising that on some occasions, projects do not proceed. There are a number of reasons why this may happen. For example, an organisation may change the direction of its project, be unable to meet its co-investment contribution or face a sudden change in industry conditions that affects the demand for its products or services. While it is disappointing when projects are not able to proceed as planned, it provides an opportunity for another organisation to realise the benefits of an RDF grant.

This is because any funding that has been offered to projects that ultimately do not proceed is reinvested in the RDF, so that not one cent of funding is lost as part of this process. But the RDF is not spent only through grants to businesses. The broad objectives of the RDF are to support regional economic development by creating new jobs and improving career opportunities; providing better infrastructure, facilities and services; strengthening the economic, social and environmental base of communities; supporting the development and delivery of projects; and leveraging funding and investment.

I would like to use this opening statement to tell you how the RDF has supported some specific projects of this nature. We know that keeping young people and future leaders of our region in or connected with our communities is critical to the social fabric of regional areas. To support this, a $2 million Regional Youth Traineeship Program was established in September 2015. This program provides 57 young people the opportunity to gain a traineeship in regional local government. It offers participating local government organisations $14,500 per year for two years per trainee to provide entry-level employment for young people. This program was so successful in round 1 that, in October 2016, I announced an additional $2 million for a second round of the program.

Another important regional issue is digital technology and the benefits it can provide. To ensure that South Australia's regional and remote communities can maximise the potential this technology offers, this government pledged a co-contribution of up to $2 million to round 2 of the Australian government's Mobile Black Spot Program, and $1 million of the state government's commitment came from the RDF. State government funding contributed to 15 of the 20 sites funded through round 2 of this program in South Australia. Four additional sites have been co-funded with Optus, using state government funding not allocated by the commonwealth as part of round 2 of the Mobile Black Spot Program.

Another issue I would like to speak directly to in this opening statement is the government's response to the economic challenges facing the Upper Spencer Gulf and outback areas. During this term, the government has contributed more than $68 million to provide targeted assistance to create jobs and stimulate economic development specifically in Upper Spencer Gulf. This has included using the RDF to support targeted grants to businesses in Upper Spencer Gulf and to support the Whyalla small business loans scheme.

It is important that the RDF can be used flexibly, including to support regions experiencing acute economic circumstances. This state budget also commits additional funding to support some key projects in the City of Whyalla which will improve amenity, appeal and tourism potential and help capitalise on a bright future for Whyalla following the sale of Arrium steelworks.

The state government funding continues to be provided to Regional Development Australia associations (RDAs) based on agreed grant funding guidelines that incorporate activities for all three tiers of government, and provide for a renewed emphasis on regional economic development. This is a funding commitment of $3 million per year to regional communities through the seven non-metropolitan RDAs. I am pleased to see the commonwealth's financial commitment to the RDA structure in the recent federal budget, but I am also keen to absorb the full extent of the RDA review in due course. This has been undertaken by the commonwealth government of Australia.

No matter how often I visit the regions, I always hear about the potential new opportunities the people of these communities see as key to their future. As Minister for Regional Development and as a passionate advocate for regions, I will continue to visit the regions and ask the people what is important to them now and for future generations.

It is very important to me that the government acknowledges the contribution of our regions to the wellbeing of this state and that regional economic and social growth opportunities are recognised and promoted. That is why I will continue to ensure that the commitments made under the Charter for Stronger Regional Policy will be delivered.

Chair, in concluding these introductory remarks I reiterate that the government understands that the prosperity and success of regional South Australians and their communities underpins the sustainability of the entire state. The contribution that our regional industries make to the state economy, our prosperity and wellbeing and the government's role in supporting regional economies and communities remain vital in building a better future for all South Australians. There are many opportunities available, but we also know that challenges are a constant. The government will continue to work closely with the commonwealth and local governments, industry, business and communities in striving to get the best possible outcomes for regional South Australians and, therefore, for all of us.

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

Mr PEDERICK: I will make a brief opening statement. Certainly, as a regional member—all my life I have lived in the regions—I acknowledge the great work that comes out of the regions. It is the power base for the whole state. Talking about power, I want to reflect on the comments made by the minister and say that the government is pretty good at spin. They have spun us into this power debacle where for $25 million they could have kept the Port Augusta coal-fired power station going, yet there is going to be $558 million spent. I note that, obviously, the Turkish power boat has been sunk and they are going to run in some diesel-powered generators on trucks, which—just to note, with this government and its green ideology—is going to take its climate change values from 55 per cent to 43 per cent.

I note for my region—and it is hurting right across the state, not just in regional areas—that some of my people have been offered forward contracts since Port Augusta and Hazelwood have shut that are close to 150 per cent of their previous power bills. It is interesting that government is fixing something they put in place, as far as the lack of viable power sources for our state is concerned. I will start now, sir, if I may?

The CHAIR: Yes.

Mr PEDERICK: Thank you. I refer to Budget Paper 4, Volume 4, Program 3: Regional Development, page 32. This is in regard to the Regional Development Fund. The financial commentary outlines an $8.9 million decrease in expenses in 2017-18 due to expenditure associated with the Regional Development Fund. Can the minister provide a breakdown of the balance of the Regional Development Fund for each year over the forward estimates?

The Hon. G.G. BROCK: First up, the $15 million per year Regional Development Fund delivers support for projects that, as I said earlier, drive economic growth, create jobs and leverage private sector investments and commonwealth funding in regional South Australia. During this term of government, over $60 million in funding has been committed under the RDF to more than 90 regional economic development projects. In rounds 1 and 2 alone, that resulted in the creation of nearly 2,000 jobs and over $900 million with a private investment. I would like to hand over to Stephen, who will go into a bit more depth to answer the member's questions.

Mr JOHINKE: In the 2016-17 estimated result, the Regional Development Fund expenditure was budgeted at $26.6 million. For 2017-18 it is $17.8 million and for 2018-19 it is $19.9 million. For 2019-20 it is $15.9 million and in 2020-21 it is $15.5 million.

Mr PEDERICK: Can the minister explain why applications for the Regional Development Fund have not been open or accepted since December 2015—over 18 months ago?

The Hon. G.G. BROCK: Thank you for the question. Regional Development Fund round 3 was so highly subscribed that funding of the grant program was allocated from both the 2016-17 and 2017-18 RDF budgets. I am also proud to have committed funds from the 2017-18 RDF budget to Investment Attraction projects that will create substantial long-term jobs in our regions in partnership with Investment Attraction South Australia. These include a commitment of $900,000 for the expansion of the Costa Mushroom facility, which will create over 200 new jobs in the Murray and Mallee region. I also committed $450,000 to support 100 new jobs through the Big River Pork expansion in Murray Bridge.

I have been considering ways that the remaining funds could be used to stimulate regional economic development and jobs in light of our transitioning economy. Given this, and that much of what would have been round 4 funding was committed in round 3 applications, we are not formally calling for round 4 applications. I will continue to assess individual projects against the economic priorities of the government and taking into account also the Regions in Focus roadshows, for which we have priorities.

Mr BELL: Who made that decision to roll two financial years into one, because it seems very unfair to me that applicants, who may have been holding back under the notion that there was going to be another round, will not get an opportunity because of some decision. I am interested to know who made that decision and what consultation with members of cabinet was had.

The CHAIR: Sorry, did you say what conversations with members of cabinet were had?

Mr BELL: What consultation was had—it may have been with cabinet, may not have been.

The CHAIR: Okay, well, if it was with cabinet, we will not want to hear about that today, will we?

Mr BELL: You never know!

The Hon. G.G. BROCK: I just explained that round 3 had so many applications and I said in my earlier statement that the applications and requests for funds were above expectations. I brought forward round 3 of the Regional Development Fund to ensure that the 2016-17 funding was committed to projects for the end of the 2015-16 financial year to be invested in our regions without delay.

Funding for round 1 of the grants was allocated from the 2014-15 Regional Development Fund. Funding for round 2 of the grant applications opened in April 2015 and was allocated from the 2015-16 Regional Development Fund. As I said earlier, as round 3 was so highly subscribed, funding of the grant programs was allocated from both the 2016-17 and 2017-18 Regional Development Fund lines.

All projects I have approved, or will approve, will be the subject of formal funding deeds. All of the applications have been allocated, and the remaining funds will go towards the benefit of regional South Australia and businesses out there.

Mr BELL: Can I just get a confirmation, minister, that you made that decision and that there will not be anymore RDF rounds between now and the next state election?

The Hon. G.G. BROCK: I am not calling for rounds, but I am taking requests, concerns and applications from all across regional South Australia through the RDAs, and considering those on merit.

Mr BELL: So, just apply to the department and see how you go?

The Hon. G.G. BROCK: That is what is happening.

Mr GRIFFITHS: If I could just seek clarification: I understand that when there is a lot of demand there are a significant number of applications and it puts you in a difficult position. But, timing is everything when it comes to seeking grants because, no doubt, there have been firms—and it has been evidenced by the fact that you are considering those as they come along now, which are not part of a formal round, and you have taken away an opportunity for those who might not be linked to the information from the RDAs about the availability of the grant by applying on a single basis with you.

There needs to be, I would presume, more of a structure attached to it to give fairness and equity to all potential businesses that apply for grants, instead of what would appear to be an ad hoc approach to the management of these funds. I think there is a need for an assurance to be given to potential applicants. I take the question from Mr Bell quite seriously about the timing of the next call for funding. I would like definite clarification: before March 2017, is there an intention to have a general call or not, or just to continue with the ad hoc approach and consider them as they come in?

The Hon. G.G. BROCK: I do not particularly take to the ad hoc, but I have indicated—

Mr GRIFFITHS: You just said it, Geoff.

The Hon. G.G. BROCK: I did not say ad hoc. I said that we were looking at all the applications that are coming in through the RDAs at the moment. I would like to ask Alison Lloydd-Wright if she can further enhance and explain this in a bit more depth.

Ms LLOYDD-WRIGHT: Thank you, minister. Just to give you some context about the scale of applications that Regional Development Fund grants round received across three grants rounds. We received a total of 400 applications seeking more than $271 million of funding. That gives you some idea of how highly subscribed the Regional Development Fund grant program was. Because of that, a decision was made to ensure that that investment went into our regions without delay and, as the minister has described, that involved ensuring that applications under round 3 were funded from both the 2016-17 and 2017-18 financial years.

In terms of the remaining funds for 2017-18: as the minister has mentioned, some funds have already been committed to Investment Attraction projects, which will bring a substantial number of jobs into regional South Australia. Of what remains, the projects will be assessed on an individual basis, based on the intelligence that we have from the Regional Development Australia organisations and also our regional coordinators based in regional South Australia, who work closely with the RDAs, local councils and local businesses to develop a really robust, I guess we call it regional intelligence, about projects that are in the pipeline, all the way from conception to shovel and investment ready.

We have comfort that through that process we are aware of projects that proponents may be seeking funding for at some point in the future, as well as ones that would be ready for investment right now.

Mr BELL: My question was: who made the decision? I have not seen an answer on that one yet.

The Hon. G.G. BROCK: I have asked through the appropriate channels and what I discuss in the cabinet I am not going to be elaborating on any further.

Mr BELL: It is a very simple question: who made the decision? If it is cabinet, it is cabinet. If it is you, it is you. If it is one of your department, it is your department.

The CHAIR: If it is a cabinet decision—

Mr BELL: Then it is a cabinet decision.

The CHAIR: That is right; I am agreeing with you. If it is a cabinet decision, it is a cabinet decision. You do not need to go into how the decision was made. If it is a cabinet decision, then you could perhaps let us know that it is a cabinet decision,

The Hon. G.G. BROCK: It is a government decision.

The CHAIR: If it is a government decision, that is fine. The question has been answered. Member for Giles.

Mr HUGHES: I refer to Budget Paper 4, Volume 4, page 32, Program 3: Regional Development. What have you done as the Minister for Regional Development to attract investment in regional South Australia?

The Hon. G.G. BROCK: Attracting national and international investment into regional South Australia is essential to ensuring the long-term ongoing sustainability, growth and diversity of regional economies. With investment comes opportunities in construction, ongoing jobs and greater income into regional communities. South Australia's regions may have stand-out features which make investment attractive for national and international companies. We have great natural advantages, including fertile soil, access to water and high sunlight days, but we also have the infrastructure in place to ensure that companies can quickly and efficiently move their products to market and the workforce to support these ventures.

Beyond this, the support of the South Australian government, in case managing international investment through Investment Attraction South Australia and through the support of funds like the Regional Development Fund, has been essential in bringing new, innovative national and international companies to regional South Australia. Regional grant programs delivered throughout the year have included the Regional Development Fund, or RDF; the Upper Spencer Gulf and Outback Futures Program; and the Economic Sustainability Program, formerly the Save the River Murray Fund.

During this term of government, over $60 million in grant funding has been committed under the above grant programs, creating a significant number of new jobs and attracting local, national and international investment across the state's regions. I am proud to have used the Regional Development Fund to support major companies investing in regional South Australia. Examples of key projects from the RDF that have attracted investment from outside South Australia include:

the amount of $6 million to Sundrop Farms towards developing a solar desalination greenhouse facility in Port Augusta, attracting $200 million in investment and creating over 150 ongoing jobs. Through this support South Australia has secured this world leading facility;

Inghams Enterprises will receive $3.7 million across two projects, attracting a combined total of $63.6 million in investment and creating 41 ongoing jobs. Projects include a new feed mill at Murray Bridge and constructing four chicken breeding farms at Yumali in the Murray Mallee, bringing jobs to regional South Australia that could have gone to another state;

Costa mushrooms will receive a grant of $1.8 million from the government, with equal contribution from the RDF and the Economic Investment Fund, administered by Investment Attraction SA. This funding will assist the company to expand its Monarto mushroom facility. It will attract $65 million in investment and lead to the creation of 200 ongoing jobs. As a result of this support the company chose to expand its South Australian operations instead of an operation in another state; and

Big River Pork was granted $900,000, also with an equal contribution from the RDF and the Economic Investment Fund. By expanding the existing Murray Bridge processing facility the company expects that the project will lead to the creation of over 140 ongoing jobs and attract $14 million in investment.

All of these regional initiatives are in addition to the government's broader commitment to make South Australia the best place to do business. Companies from all over the world are recognising what regional South Australia has to offer, with hundreds of millions of dollars worth of private investment in South Australia's regions in the pipeline for the next three years. I look forward to continuing to work hard to attract even more investment to help South Australia's regions grow to their most productive and prosperous.

Mr BELL: Minister, are you able to detail to the committee the dollar amount spent in the seat of Frome from the Regional Development Fund?

The CHAIR: Same budget line, I assume?

Mr GRIFFITHS: Well if it is not, we would be worried!

The CHAIR: I am just checking for the record. People in the future will pore over these pages, and we need them to be directed properly.

The Hon. G.G. BROCK: If I may, while we are getting that information, as the Minister for Regional Development I consider grant applications for projects located across regional South Australia. In accordance with the Ministerial Code of Conduct, I aim to prevent any potential, actual or perceived conflict of interest between my responsibilities as the member for Frome and as the Minister for Regional Development. I have therefore instructed Regions SA to ensure that any proposals for funding support to projects in the Frome electorate are considered by another minister. I repeat that: any projects in the electorate of Frome are considered by another minister.

This includes projects in the current electorate of Frome and for projects considered after the confirmation of the new electoral boundaries in the new district of Frome, as I intend to recontest my seat. As at 30 June, 20 applications have been referred to another minister from the Regional Development Fund and Upper Spencer Gulf and Outback Program, of which 13 were approved.

Mr GRIFFITHS: And a dollar amount?

The Hon. G.G. BROCK: I will ask Alison if she has all that information.

Ms LLOYDD-WRIGHT: So, from the Regional Development Fund grants programs, the total government assistance, the total value of grants offered in the electorate of Frome, is $2,453,000.

Mr GRIFFITHS: How does that compare to the total dollars granted in that same period?

Ms LLOYDD-WRIGHT: Across all RDF we have granted over $60 million to date.

Mr GRIFFITHS: Chair, if I can get clarification on that.

The CHAIR: Did you want to add something to that minister?

The Hon. G.G. BROCK: I want to get this clear. Alison said, 'We have granted $60 million,' that is not for the electorate of Frome, I would hope.

Ms LLOYDD-WRIGHT: No, that is from the development fund.

Mr GRIFFITHS: Minister, I did not assume that. Be rest assured I accept that information as being across the state.

The Hon. G.G. BROCK: In Hansard it may appear—

Mr TRELOAR: It won't; she explained it.

Mr GRIFFITHS: Given that part of the minister's response referred to the current boundaries of Frome and the future boundaries for the Frome electorate, and therefore you are considering applications that are coming in on a one-on-one basis—I use my term ad hoc—and not part of any process, in referring those applications to another minister for consideration, does that mean all applications are going to another minister? Otherwise, how does a minister consider recommendations that are based on a priority if those other applications from other areas are being considered by you as part of a separate process? I just need some clarification on how that is handled.

The Hon. G.G. BROCK: I will ask Alison to elaborate a bit further, but I will listen very carefully myself.

Ms LLOYDD-WRIGHT: The process for us making recommendations on the expenditure of funds from the Regional Development Fund involves, as the minister outlined and as you rightly identified, as we are considering projects that might come in since the closure of round 3, anything that is in the current boundary of Frome or the proposed new boundary of Frome will be considered by another minister. Applications from outside those areas will be considered by the Minister for Regional Development. He will be advised of the total value of applications being considered by another minister, but no further information.

Mr GRIFFITHS: Then my question becomes: how does a minister, only having the dollar figure available to them, not what the applicant's name is, the project that they are undertaking, the economic benefit to be derived, the number of jobs to be created as part of that, consider that on a priority basis compared to other applications that the minister himself is considering?

Ms LLOYDD-WRIGHT: We intend that a cross-government panel will consider these applications that have come in since the closure of round 3 and they will rank the applications and the ministers will be advised of the relative ranking of the proposals they receive. The panel will also be assessing them for exactly those types of things you described: how well they align to the criteria of the Regional Development Fund, how many jobs are created, what the other flow-on economic benefits for the region are, and so on.

Mr GRIFFITHS: I wish I had had that detail in the first response. Thank you.

The Hon. G.G. BROCK: Does that answer your question?

Mr GRIFFITHS: It does.

Mr PEDERICK: Well, we will keep going. Minister, in response to your commentary about Inghams, Costa Mushrooms, Adelaide Mushrooms and Big River Pork, it was obviously a directive from the government, from the Premier down, that I as the local member was not to be invited to any of these launches and funding announcements.

Anyway, be that as it may. I also make the point that it is interesting to note this sudden interest in parts of my electorate. When the government knocked back $25 million of federal money in the diversification fund, which would have assisted river communities from the border near Victoria to the mouth of the river, did the minister lobby the Treasurer and the Premier in regard to accepting this vital money into regional South Australia?

The Hon. G.G. BROCK: First up, the member for Hammond is very aware of what I have done previously. I have had many discussions with him inside and outside the chamber and goodness knows what else. This is now the responsibility of minister Mullighan. Questions about the discussions with the commonwealth government and any further questions will need to be directed to him.

However, I will say that since early 2013, South Australia worked in good faith to support the Australian government's Murray-Darling Basin Regional Economic Diversification Program. In doing so, it was made clear that the delivery of the program should not result in negative horizontal fiscal equalisation impacts for South Australia.

I endeavoured to find a way through this matter with the commonwealth government to deliver the funds without disadvantaging South Australia. The member for Hammond knows exactly where we went. We tried to put it through the RDAs, through the local governments, and I asked the commonwealth government to deliver them on their own.

On 26 June 2015, the Assistant Minister for Infrastructure and Regional Development, Hon. Jamie Briggs MP, announced that the Australian government will deliver an additional $25 million for South Australian regional roads by redirecting unspent funds from the Murray-Darling Basin Regional Economic Diversification Program to regional roads packages. I had plenty of discussions, as we all did, to try every way to get that money put into there without affecting the GST.

Mr PEDERICK: It is interesting, seeing three other states took it. But anyway, I will keep going. In regard to the rolling round application process that seems to be in place for Regional Development Fund applications, have you had any businesses express disquiet because they did not allow for the funding, expecting another round to open in the future?

What I am talking about is the businesses that would have applied for 2017-18 but did not. They were waiting for the round to open up, but you have indicated that round 3 was already opened up through 2017-18. I am suggesting that plenty of businesses did not even put in an application because they were not ready to go. Have you had any disquiet expressed to you from people who did not make the rolling lottery?

The Hon. G.G. BROCK: There has been media on this and it has been discussed before. To answer your first question of whether anyone came to me: to my knowledge, no. But we have had media releases out there, and the RDAs themselves are aware of this.

Mr PEDERICK: Can the minister confirm how many of the developments that received Regional Development Fund grants would have occurred without these grants? For instance, the McLaren Vale Distillery development went ahead without RDF funding.

The Hon. G.G. BROCK: First up, I do not think there is any way we would be able to identify that. One thing I will say is that the Regional Development Fund, as I said earlier, has been an overwhelming success. We have been inundated with applications and entries and requests and things like that. Through due diligence, we make certain that business cases are sustainable and things like that.

The RDF has accelerated many projects out there. That has been made very clear in a lot of businesses out there. As for projects that went ahead without RDF, I have no idea. There is no opportunity for us to be able to answer that.

The Hon. S.W. KEY: Minister, building on what you have just said, can you inform the committee of events that showcase South Australia's regions? I am referring to Budget Paper 4, Volume 4, page 32, Regional Development. So, taking a more positive view about what has been happening.

The Hon. G.G. BROCK: I thank the honourable member for her question and I thank the Chair. Our regions are critical to South Australia's prosperity. Around 29 per cent of South Australians live outside of Adelaide yet our regions contribute over $25.5 billion to our economy and produce over half the state's merchandise exports. Regional South Australia is a thriving place to do business.

As Minister for Regional Development, I am focused on making sure we invest in the critical infrastructure needed to make sure regional South Australia remains competitive, productive and profitable for local businesses. To be competitive, regional businesses need access to secure water and to reliable and fast transport routes. Regional development funds have also been invested and have leveraged funds from the federal government to invest in major infrastructure projects that will give cheap, reliable access to critical infrastructure.

I am pleased to inform you that I have recently committed $3.18 million from the Regional Development Fund to the Bundaleer Pipeline Scheme, subject to matching commonwealth funding. This scheme will provide an economic source of water to industry and businesses near the Bundaleer Reservoir, accelerating and expanding high agricultural production, creating jobs and encouraging on-farm investment.

At full production, the Bundaleer Pipeline Scheme will deliver an additional 275 megalitres of water a year for new agricultural activity, generating around $4.6 million annual revenue for the region, and opportunities for industry growth and expansion. Access to fast and reliable freight routes is an essential part of making regional South Australia a great place to do business.

I am also pleased to advise that project 2 of the government's very successful 90-day road transport project is underway. This project was initiated jointly by PIRSA, Primary Producers SA and DPTI. Industry has estimated the benefits of project 1 to be at least $56 million in both savings and improved productivity, which is a fantastic result. With strong industry support, project 2 has started work on the longer-term issues from project 1, and to identify new issues.

As part of project 2, we have engaged with businesses and industry, including primary producers, transport operators, local government and Regional Development Australia associations to identify their transport issues, including route deficiencies in limiting vehicle access, loading and unloading sites, and oversize and over-mass vehicle restrictions on public roads.

Through the RDF, I have also been pleased to support projects that improve freight and logistics, making it easier for regional producers to get to national and international markets. For example, approximately 100 kilometres north of Adelaide in Balaklava, Bowmans intermodal is Australia's largest inland port and is critical to transport productivity for regional industries and exporters, particularly South Australia's mining and agriculture.

With the support of an $840,000 RDF grant, an expansion project to duplicate the rail line will increase the capacity and the value-added activities at this site. The project will double the capacity from 25,000 twenty-foot equivalent units shipping containers per year to 50,000 through its road-rail operations. The expansion will create 15 ongoing full-time jobs plus additional jobs during construction.

We also made $2 million available as a state contribution to the federal Mobile Black Spot Program, which will result in 24 new mobile towers being built across regional South Australia. At the end of the federal government's process, the state government negotiated with mobile network operators directly, allocating over half a million dollars towards the construction of four new mobile phone towers. These towers will increase mobile phone coverage in blackspots in the Mid North, South-East and Riverland regions.

Access to mobile services is critical to both the safety of regional communities and the prosperity of regional businesses, allowing them to access markets and process transactions. They will ensure around 2,100 residents, schools and businesses within a 10-kilometre radius of the towers will have increased 4G coverage, with better call experiences and faster, more reliable mobile internet service. All of these regional initiatives are in addition to the government's broader commitment to make South Australia the best place to do business.

Mr BELL: Minister, you said that regions are thriving: how is it then that regional populations are in decline?

The CHAIR: That is a pretty broad question to ask the minister; I am interested to see how he will answer it.

The Hon. G.G. BROCK: The government has initiatives that target jobs growth in regional South Australia; however, these are a matter for minister Maher and I would ask that the member direct his questions to him.

Mr GRIFFITHS: If I may seek clarification. Minister, this question relates to your comment during your last answer about 29 per cent of the population being in regional South Australia. Are you able to provide, from briefings that you have been involved in, what the forward projections are for the population of regional South Australia, of that total amount? Particularly, I am a bit concerned because we have the projection of a two million population by 2030, I think it is. What I have read is that there is a much lower level of population growth, if indeed it exists in regional South Australia, so I am wondering from your perspective what information you have been provided with.

The Hon. G.G. BROCK: The population projections, as I mentioned earlier, are for minister Maher. Again, I ask the member for Goyder to direct that question to minister Maher at the next opportunity.

Mr PEDERICK: Last year, the minister put out a joint press release claiming that an RDF grant of $500,000 had been given to McLaren Vale Distillery. They have since said they declined the grant because the conditions attached to the grant were too onerous. Notwithstanding this the media release stayed on PIRSA's website for around 18 months afterwards. In the Budget and Finance Committee this year PIRSA representatives revealed that this was not a once-off and it had happened on a number of occasions. How many grants have been refused, like the McLaren Vale Distillery grant?

The Hon. G.G. BROCK: Sorry, can you repeat the last part of that question?

Mr PEDERICK: How many grants have been refused by businesses that were given the grants, equivalent to the refusal by the McLaren Vale Distillery grant process?

The Hon. G.G. BROCK: Thank you; I just did not quite hear the last section of that question. As at 30 June 2017, over the 90 projects that have received funding from the Regional Development Fund in just three years, only a small number did not proceed. There are a number of reasons that a project may not proceed, including that an organisation may change the direction of its project, be unable to meet its co-investment contribution or face other industry conditions that affect the demand for its product or service. I will hand over to Alison Lloydd-Wright, who will give more in-depth details on the question.

Ms LLOYDD-WRIGHT: Thank you, minister. Specific examples of why some projects that applied for RDF grants did not proceed include:

commercial decisions to rescope the project;

a commercial decision to redirect business finances and not proceed with the project at the same scale;

a commercial decision not to proceed with the project because of a downturn in the mining sector; or

a commercial decision to allow a third party not associated with the applicant to undertake the project.

Of those RDF grant recipients or people who have accepted the offer of a grant who have subsequently withdrawn, only one has identified the terms and conditions of the grant as being the cause of their withdrawal; the rest are really related to changes in business circumstances.

I think it is safe to say that over 90 recipients of grants from the Regional Development Fund, from small businesses up to large international businesses, managed to accept the terms and conditions of the grants and clearly did not find it too onerous a process. But certainly, those terms and conditions do exist because we are spending public money and we do need to manage the risks associated with that. That means that we do have some requirements as part of the grant deeds that mean that we could reclaim the assets bought with the funding, if that ever became necessary.

The other really important thing to note is that whenever grants do not proceed, such as in the case of McLaren Vale Distillery, that money is not lost to the Regional Development Fund. Funding is only ever paid out on a reimbursement basis as milestones identified by the applicant are met. All that it meant when McLaren Vale Distillery, for example, withdrew from the grant process was that that funding returned to the Regional Development Fund to be available for other applicants.

Mr PEDERICK: For clarity, minister, how many grants were refused? What was the total value of the grants that were refused on whatever basis? Who were these grants supposedly awarded to?

The Hon. G.G. BROCK: Again, I will ask Alison Lloydd-Wright to answer. She has all that information here, and hopefully, we will be able to answer the member's questions.

Ms LLOYDD-WRIGHT: Of 88 projects offered grants from the Regional Development Fund grant rounds, seven did not proceed after they were announced. That includes six from round 1 and one from round 2. In relation to the second part of the question regarding total value, I need to take that on notice.

Mr PEDERICK: Can you tell us who they were awarded to? Who knocked back the grants?

Ms LLOYDD-WRIGHT: I do not know if we can, but I will investigate and provide some information on notice.

Mr PEDERICK: In previous financial periods, PIRSA has commissioned reports by EY into the economic value of RDF grants. Has PIRSA commissioned any reports for the 2016-17 period?

The Hon. G.G. BROCK: From 2014-15, the Regional Development Fund was increased from $1.6 million per year to $15 million per year. The report shows that the main benefits of the RDF to South Australia are through accelerating companies' own investment, enabling additional investments to add further value, and enabling projects to progress that otherwise would not have. The impacts of the Regional Development Fund reach far and wide across South Australia with both direct and indirect job creation, increased economic activity and greater investment, bringing confidence and growth in regional communities. I invite the chief executive to provide the committee with further information regarding that question.

Mr ASHBY: As you are aware, Ernst and Young undertook that study. That was released on 19 May 2016. That assessed the overall economic impact of projects awarded grant funding under rounds 1 and 2 of the Regional Development Fund. I can inform the committee that the report demonstrated that, from the funding for rounds 1 and 2, $33.7 million in grants was awarded to 61 projects at that time, worth a combined $5.6 billion to the state economy. The report produced by Ernst and Young, I think, really demonstrated the value of that increased investment, in particular for the regions.

In relation to whether or not we are having a further evaluation undertaken about the competitive round 3 grant, I can advise that a competitive tender approach was used when commissioning studies for rounds 1 and 2 in accordance with state government procurement policy, and as Ernst and Young completed the work using a specific evaluation methodology, we have again procured their services to extend the study to include round 3.

Mr BELL: On page 33, under mobile blackspots, dot point number 2 refers to $1 million committed from the RDF for mobile blackspot funding. South Australia was the only state to commit zero dollars to the first round of funding and only $2 million in round 2. All other states have committed in excess of $141.5 million. This culminates in South Australia contributing less than 2 per cent of overall funding. Whose idea was it to use RDF funding for mobile blackspots?

The Hon. G.G. BROCK: A number of mobile blackspots are situated in regional, rural and remote areas, which are disadvantaged by not having access to mobile phone services.

Mr BELL: Minister, I asked whose idea it was.

The Hon. G.G. BROCK: I understand. If you can be a bit patient you will hear.

The CHAIR: The minister is allowed to contextualise his answer.

Mr BELL: In a prepared speech.

The CHAIR: Yes, he is allowed to contextualise his answer.

The Hon. G.G. BROCK: I am a very passionate advocate of our regions, which is why, at the time of the 2016-17 budget, I committed $1 million to the Regional Development Fund to boost the government's overall contribution towards the Mobile Black Spot Program to $2 million. The program is a nationally competitive grants program that provides funding to mobile network operators to build new mobile base stations in regional locations. The South Australian government submitted a list of 22 priority sites, seeking federal government funding through round 2 of this project.

The federal government announced funding for 20 sites in South Australia, 18 of which were the priority sites identified by the South Australian government. State government funding co-contributed to 15 of these sites. Four additional sites have been co-funded with Optus, using state government funding not allocated by the commonwealth as part of round 2 of the Mobile Black Spot Program. The federal government has announced that round 3 of the program will not require a state government contribution.

There is still more that can be done to address mobile blackspots, which is why we will continue to work with the federal government to improve mobile coverage across our state. I was just advised that the member wants a bit more information on that. Again, if he can ask minister Maher at his next opportunity.

The CHAIR: Thank you, minister. I want to recognise, in the gallery, a former member of the other place and the former member for Mount Gambier, I believe: the Hon. Rory McEwen, a former minister. The member for Giles has a question.

Mr HUGHES: I refer the committee to Budget Paper 4, Volume 4, page 33, highlights 2016-17. I do so given the extent of pastoral leases in my electorate and the presence of a significant number of Aboriginal communities. Can the minister update the committee on recent developments in assisting Indigenous landholders?

The Hon. G.G. BROCK: I thank the member for his question to the committee. The North West Indigenous Pastoral Project was established in April 2015 with state government funding of $1.4 million over two years to bring more Indigenous-owned land into production and to establish viable pastoral businesses by employing and training Indigenous pastoral workers. The first year of the project was funded from the government's regional Jobs Accelerator Fund. The aims of the program are to stimulate or fast-track investment to generate new and sustainable employment and participation opportunities.

The 2016-17 state budget announced that the North West Indigenous Pastoral Project would receive an additional $1.49 million over two years to 2017-18 to employ more Indigenous pastoral trainees. As of June 2017, the program has employed a total of 46 Indigenous workers and brought 200,000 hectares of land back into pastoral production. Of the three million hectares of Indigenous land in the north-west of South Australia, only 5 per cent is currently grazed under Indigenous-owned stock, but I am advised that, through this project, a further 315,000 hectares is scheduled to come back into production this year.

The North West Indigenous Pastoral Project, which has now received nearly $3 million of funding, has been very successful in its engagement with Indigenous landholders, the business sector (particularly BHP) and the Indigenous Land Corporation. This project is an example of what can be achieved in a relatively short time with effective government leadership and investment. Of course, there is more work still to be done, but again I congratulate all project and community partners on making this project such a success and I sincerely look forward to reporting on future achievements.

I again reinforce that, if we work like this one here, which is a great project, as with the trainees through the Local Government Association, and if we work together with the private industries, the sector out there, in a collaborative way, we can achieve great results. It is when we do not work together and go down the same direction that we have an issue.

Mr BELL: There is no big impediment to regional business and growth and road infrastructure. Can the minister provide detail on how much is being spent on regional road infrastructure over the forward estimates?

The CHAIR: I would image that is a question for minister Mulligan, but the minister can feel free to answer any way he wishes.

Mr BELL: I am sure he has discussions with other ministers.

The CHAIR: Yes, but he is not responsible for it; that is the point of estimates.

Mr GRIFFITHS: $36 million in the Upper Yorke area, Geoff. We are pleased about that.

The CHAIR: Does the minister have a ready answer at hand?

The Hon. G.G. BROCK: We have regular discussions, of course, and, as the member for Goyder just indicated, he is very happy for the nearly $40 million in the member's electorate. Seriously, I think that is a question that must be directed to the Minister for Transport, and I have indicated that the best way to get more information is to refer the question to minister Mullighan when you have the opportunity.

The CHAIR: There being no further questions, I declare the examination of the proposed payments completed.

Sitting suspended from 15:47 to 16:00.