Estimates Vote

Department for Trade and Investment $106,640,000

Administered Items for Department for Trade and Investment $951,000

Minister:

Hon. N.D. Champion, Minister for Trade and Investment, Minister for Housing and Urban Development, Minister for Planning.

Departmental Advisers:

Mr D. Reynolds, Chief Executive, Department for Trade and Investment.

Ms M. Antcliff, Deputy Chief Executive, Department for Trade and Investment.

Ms S. Adlaf, Director, Strategic Operations, Department for Trade and Investment.

Ms R. Lang, Manager, Finance, Procurement and Facilities, Department for Trade and Investment.

The CHAIR: Welcome to today's hearing for Estimates Committee B. I respectfully acknowledge the traditional owners of this land upon which the committee meets today and the custodians of the sacred lands of our state.

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

The Hon. N.D. CHAMPION: I can confirm that.

The CHAIR: Changes to committee membership will be notified as they occur. Members should ensure the Chair is provided with a completed request to be discharged form. If the minister undertakes to supply information at a later date, it must be submitted to the Clerk Assistant via the answer to questions mailbox no later than Friday 2 September 2022.

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

All questions are to be directed to the minister, not to the minister's advisers. The minister may refer questions to advisers for a response. Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced. Members unable to complete their questions during the proceedings may submit them as questions on notice for inclusion in the assembly Notice Paper. I remind members that the rules of debate in the house apply in the committee. Consistent with the rules of the house, photography by members from the chamber floor is not permitted while the committee is sitting.

Ministers and members may not table documents before the committee; however, documents can be supplied to the Chair for distribution. The incorporation of material in Hansard is permitted on the same basis as applies in the house; that is, that it is purely statistical and limited to one page in length.

The committee's examination will be broadcast in the same manner as sittings of the house are broadcast, through the IPTV system within Parliament House via the webstream link to the internet and the Parliament of South Australia video-on-demand broadcast system.

I will now proceed to open the following lines for examination. The portfolio is the Department for Trade and Investment. The minister appearing is the Minister for Trade and Investment. I declare the proposed payments open for examination. I call on the minister to make a statement, if the minister wishes, and to introduce advisers. I call on the lead speaker for the opposition to make a statement, if he so wishes. I call on the members for questions.

The Hon. N.D. CHAMPION: Thank you, Chair. I will make introductions and a very short statement. I would like to introduce my department officers here with me today. On my left is Mr David Reynolds, Chief Executive of the Department for Trade and Investment, and to his left is Rebecca Lang, Manager for Finance, Procurement and Facilities. On my right is Megan Antcliff, Deputy Chief Executive of the Department for Trade and Investment, and behind me is Sophie Adlaf, Director of Strategic Operations.

I would like to thank the department and everyone in it for their very hard work over what has been a difficult year, I think, with the pandemic and a lot of turmoil in international geopolitics and a resulting turmoil in international trade, particularly on the freight and logistics side and energy markets. I would like to particularly thank those employees of the department in foreign posts, who have had a somewhat different experience to us of the pandemic.

Obviously, that varies from country to country but those in China, in particular, have had a starkly different experience to us. I would like to thank them for their hard work and for their commitment to the department at this time. I think this is an important function for the exercise of our democracy and so I welcome questions from the opposition.

Mr COWDREY: I am going to begin with the omnibus questions, if that is okay.

The CHAIR: That is an unusual approach. Let's get it out of the way.

Mr COWDREY: Just to get everyone settled in for the morning.

1. For each department and agency reporting to the minister, what is the total cost of machinery of government changes incurred between 22 March 2022 and 30 June 2022?

2. For each department and agency reporting to the minister, which administrative units were established, abolished or transferred to another department or agency between 22 March 2022 and 30 June 2022 and what was the cost or saving in each case?

3. For each department and agency reporting to the minister, how many executive appointments have been made since 22 March 2022 and what is the annual salary and total employment cost for each position?

4. For each department and agency reporting to the minister, how many executive positions have been abolished since 22 March 2022 and what was the annual salary and total employment cost for each position?

5. For each department and agency reporting to the minister, what has been the total cost of executive position terminations since 22 March 2022?

6. For each department and agency reporting to the minister, will the minister provide a breakdown of expenditure on consultants and contractors with a total estimated cost above $10,000 engaged between 22 March 2022 and 30 June 2022, listing the name of the consultant, contractor or service supplier, the method of appointment, the reason for the engagement and the estimated total cost of the work?

7. For each department and agency reporting to the minister, will the minister provide an estimate of the total cost to be incurred in 2022-23 for consultants and contractors, and for each case in which a consultant or contractor has already been engaged at a total estimated cost above $10,000, the name of the consultant or contractor, the method of appointment, the reason for the engagement and the total estimated cost?

8. For each department and agency reporting to the minister, will the minister advise whether it will be subject to the 1.7 per cent efficiency dividend for 2022-23 to which the government has committed and, if so, the budgeted dollar amount to be contributed in each case and how the saving will be achieved?

9. For each department or agency reporting to the minister, how many surplus employees were there at 30 June 2022, and for each surplus employee, what is the title or classification of the position and the total annual employment cost?

10. For each department and agency reporting to the minister, what is the number of executive staff to be cut to meet the government's commitment to reduce spending on the employment of executive staff by $41.5 million over four years and, for each position to be cut, its classification, total remuneration cost and the date by which the position will be cut?

11. For each department and agency reporting to the minister:

What savings targets have been set for 2022-23 and each year of the forward estimates;

What is the total FTE impact of these measures?

12. For each department and agency reporting to the minister, will the minister advise what share it will receive of the $1.5 billion the government proposes to use over four years of uncommitted capital reserves held in the budget at the time it took office and the purpose for which this funding will be used in each case?

13. For each department and agency reporting to the minister:

What was the actual FTE count at 30 June 2022 and what is the projected actual FTE count for the end of each year of the forward estimates;

What is the budgeted total employment cost for each year of the forward estimates; and

How many targeted voluntary separation packages are estimated to be required to meet budget targets over the forward estimates and what is their estimated cost ?

14. For each department and agency reporting to the minister, how much is budgeted to be spent on goods and services for 2022-23 and for each year of the forward estimates?

15. For each department and agency reporting to the minister, how many FTEs are budgeted to provide communication and promotion activities in 2022-23 and each year of the forward estimates and what is their estimated employment cost?

16. For each department and agency reporting to the minister, what is the total budgeted cost of government-paid advertising, including campaigns, across all mediums in 2022-23?

17. For each department and agency reporting to the minister, please provide for each individual investing expenditure project administered, the name, total estimated expenditure, actual expenditure incurred to 30 June 2022 and budgeted expenditure for 2022-23, 2023-24, 2024-25 and 2025-26.

18. For each grant program or fund the minister is responsible for, please provide the following information for the 2022-23, 2023-24, 2024-25 and 2025-26 financial years:

Name of the program or fund;

The purpose of the program or fund;

Budgeted payments into the program or fund;

Budgeted expenditure from the program or fund; and

Details, including the value and beneficiary, or any commitments already made to be funded from the program or fund.

Minister, I take you to Budget Paper 4, page 108 of the Budget Measures Statement. Does the minister believe that the 2022-23 budget will allow his department to grow the trade and investment sectors in South Australia?

The Hon. N.D. CHAMPION: The short answer is yes. Part of that is that as part of our election commitments we have decided to make Invest SA the core plank of our economic growth platform. Invest SA is within the Department for Trade and Investment and is the mechanism by which the government will ensure the attraction of strategic new investment into the state. It is an important commitment and will involve Invest SA taking an account management approach to key investment targets, to clients, to ensure that their investments in South Australia are ambitious in scale, integrated with the local ecosystem and realised in a timely manner for the greatest economic impact.

Mr COWDREY: What are the operating savings being made up of in 2022-23 and over the forward estimates?

The Hon. N.D. CHAMPION: The impacts in 2022-23, the allocated savings target, is $4.7 million reducing to $4 million ongoing by 2025-26. We regard that as a perfectly reasonable savings target. We tasked the chief executive with finding efficiencies within the department to realise that target. You may have noticed that we made an announcement today about not proceeding with the Paris trade office. That is an indication of the sorts of savings we are prepared to make in order to reach our target.

Mr COWDREY: How much of this financial year's savings task has been allocated across the department to date?

The Hon. N.D. CHAMPION: It is early days, and we are still working on that.

Mr COWDREY: Have any of the savings tasks for 2022-23 been allocated to the department?

The Hon. N.D. CHAMPION: I think I just answered your question. We are currently in a process of reviewing the department. As I said before, we have made an early saving of some $500,000 already by not proceeding with the proposed trade office in Paris.

We believe that we have a former trade minister as our Agent General in London. We have an office of seven staff over there. Two of those are administrative—a driver and a personal assistant—but the remainder are focused on trade issues, and we believe that all of Europe can be serviced and dealt with through our substantial office in London, which of all trade offices I think has the biggest staffing component. We believe that we can grow investment and traction while making savings, and commit to the important budget task that we have been set.

Mr COWDREY: When does the minister anticipate that his CE will have allocated the savings task to his department?

The Hon. N.D. CHAMPION: It is anticipated that everything will be done by the Mid-Year Budget Review, and all agencies will have reported back by that time.

Mr COWDREY: How do you anticipate making a four-year saving of $4.7 million this financial year if the savings tasks are not allocated until midyear?

The Hon. N.D. CHAMPION: I think the Paris office is a good example of how you can make savings across a time line in order to achieve the overall savings target, so I do not think that is an issue. We will report all of those savings by the Mid-Year Budget Review.

Mr COWDREY: How will the minister ensure that the savings task allocated to his department does not impact trade results?

The Hon. N.D. CHAMPION: As I said before, as part of our election commitments we have already established Invest SA, which will be a very important platform for growth in the state. Obviously, we also have our overseas trade missions as well, which we have tasked with that process. We believe that Invest SA will be a very important mechanism to attract investment, and we are confident that we can both play our role in growing the economy and providing jobs and foreign investment, as well as meeting our savings task.

I might point the member also to our substantial commitments in both hydrogen and plant protein, which of course run across governments and have, I think, broad bipartisan support for the most part. We are confident that the state's economy, and trade and investment, will all grow over that period.

Mr TELFER: Minister, is the decision not to proceed with the Paris trade office an admission that trade with the EU is not as important as other targets?

The Hon. N.D. CHAMPION: No. At the moment, as I understand it, the EU free trade agreement negotiations with Australia have recommenced, but they have not finalised. To give you an example, they were postponed in October 2021, they resumed in 2022. Our annual merchandise exports to the EU are some $980 million. Interestingly enough, I am advised that our top three markets are Belgium, the Netherlands and then France, and our top exports are canola, wine and almonds this year. It is just an interesting fact.

If you look at the geography, while Brexit has clearly separated the United Kingdom and Europe, with the exit, or Brexit, being the end to that political project, it does not stop geography. It is still easy for our London office to service all of Europe, and they have the resources and, as I said before, a former trade minister who is keen to do so. We are confident that we can service that market from London in the same way we would expect our trade missions in New York or Houston to reach out to Chicago or Philadelphia, for instance.

We often ask our trade offices to be based in a city, but do sometimes go across a geographical land mass, and we think that is a perfectly reasonable thing to be done in this instance. It is not an admission of a lack of interest or lack of commitment, it is just simply a sensible savings measure, which we think the people of South Australia will agree with.

Mr TELFER: Do you think the non-existence of an FTA with the EU creates a greater importance for a trade office relationship with the EU, as opposed to when there is an FTA in place, because there needs to be, obviously, more targeted and specialised agreements, especially with the $980 million worth of trade that you highlighted?

The Hon. N.D. CHAMPION: I am not quite sure about for how long the negotiations have been going on with an EU free trade agreement, but it certainly has been an issue for some time. I might find that out for you. Clearly, it is led by DFAT and by the national government. But you have to remember that at the moment there is war in Europe, so there is a very big change in European energy, defence and foreign policy, particularly if you look at Germany, which I think is rethinking its energy mix. That perhaps will change the way we engage with Europe.

We had a very big delegation from Germany on hydrogen at the recent Australian hydrogen conference—a lot of interest, which I think is good for the state. Europe remains important, but sometimes we can think of Europe as Western Europe, but Europe stretches from France right across Ukraine right up to the Baltic states. It is a very big place, and we are confident that we can engage with it from the London office.

Mr TELFER: Just a bit more on that: you have highlighted economically and logistically how you would manage that. What do you think diplomatically the perceptions will be from members of the EU to see the only trade office being the one run out of a non-EU entity within Europe?

The Hon. N.D. CHAMPION: I do not think there will be a great deal of issue with that at all. I think they will understand that it is a practical budget measure, and they will understand that we have a large office in London. That office is very well equipped to deal with that.

Mr COWDREY: Minister, what services will Invest SA offer that are different from current trade and investment services?

Ms STINSON: On a point of clarification, Chair, what page number are we on at the moment that this question relates to?

The CHAIR: Page 108, I believe.

Mr COWDREY: It is the same page, 108—the expenditure for Invest SA is part of that page.

The Hon. N.D. CHAMPION: Thanks for that clarification. Obviously, the key difference is that we will take an account management approach, which as I understand it we have not previously taken, and that is basically about taking good care of and paying a lot of attention to the clients who come to us, making sure their investments in South Australia are ambitious in scale, are integrated with the current economy, are realised in a timely manner and deliver great economic impact.

I am confident that the department will give them the required attention and service that will mean that there is a qualitative difference in the way that Invest SA works. That will help attract investors in business because, in my experience, the one thing business wants is certainty, both in government decision-making and who they are dealing with, and they want to have a clear relationship as they move their investments forward.

Mr COWDREY: So there is no change in services. Are they just going to be better?

The Hon. N.D. CHAMPION: I think I have explained how they will be better. It is an account management approach rather than—

Mr COWDREY: And the department does not currently undertake an account management approach?

The Hon. N.D. CHAMPION: It is about the whole journey. In the past there might have been an interaction with an investor as they approached the department. This will really be about staying with them for their whole journey, not just doing part of it—not doing a narrow bit of it but staying with them in their interactions with government, right the way through as they make their investment, and giving them some confidence that, if they approach the South Australian government about investment, they will have facilitation right the way through their journey.

Mr COWDREY: How many additional FTE will Invest SA attract to the department?

The Hon. N.D. CHAMPION: There is an extra million dollars a year for Invest SA, but at the moment we are finalising the model. There is funding behind it. There is a clear intent, as I said before, of an account management approach that has an intent behind it, which is really about paying close attention to investors' interests.

Mr COWDREY: To be clear, is it $1 million over the forward estimates or just in this financial year?

The Hon. N.D. CHAMPION: If you look at the budget papers, it is $1 million a year, and there are six staff allocated to it in the budget—that is indicative.

Mr COWDREY: Are those six staff simply a transfer from the department?

The Hon. N.D. CHAMPION: It is additional funding and listed as additional staff.

Mr COWDREY: Minister, just to clarify one or two more things around this issue: is there no intention to have an additional trade office in any other area of Europe?

The Hon. N.D. CHAMPION: Not at this time, no. Our intention is to have our London office. You have to remember that the Agent General there is a former trade minister and former member of this chamber. He is well qualified to lead the office to engage with Europe, and we think they have the resources and expertise to do so. I met with Stephen Camporeale, who is our new regional director, and he has had long experience, both here in South Australia and in the United Kingdom, particularly in the defence sector.

I am very confident that he is interested in Europe and can service Europe. He has previously done quite a bit of work in the Baltic states; there is quite a defence relationship up there. We are confident that we can service Europe and that it is a sensible thing to do. They have the resources to do it from London.

Mr COWDREY: Minister, you mentioned a million dollars' worth of new money for Invest SA, but the cost savings being allocated to the department are $4.7 million, averaging at $4 million a year. Is that money not offset, and that FTE saving not offset, in the savings that the department has been tasked to provide to a matter of threefold?

The Hon. N.D. CHAMPION: It reflects the government's priorities. Our priority is to have Invest SA, to properly fund it and to have, as I said, an account management approach and a very intensive commitment to investors as they come to South Australia. I have also been very interested when I have talked to South Australian companies that have investments in overseas markets, and there are several. Thomas Foods is probably the most noted example. They have investments in the United States, a big abattoir in Philadelphia.

There are other South Australian companies with investments in overseas markets. Their outward investments matter a lot to the operation of those companies in South Australia. I am very keen to get the department to look at the totality of it, and Invest SA is a mechanism to do that. Of course, we will take efficiency measures which also reflect our priorities. The Paris office is an example of that. That is no different to what governments do, state and federal, including the previous government. You also had savings and efficiency targets for this department when you were in government.

Mr COWDREY: Minister, can you walk me through the current process? A business approaches your department to invest in South Australia. Who do they speak to? Is it an account manager?

The Hon. N.D. CHAMPION: At the moment, as it currently stands, there are industry sectors, and an investor will come to them. They will still get a single point of contact from that industry sector, but it is somewhat different from our new approach of Invest SA, where there will be a single portal and then a strong account management process on the way through.

Mr COWDREY: So the only change is, instead of the account manager being responsible for businesses based on their sector, they will be assigned businesses based on when they come in the door?

The Hon. N.D. CHAMPION: No. At the moment, the department is focused very much on landing the initial deal. To be clear, that is not a bad thing. In the future, Invest SA will be not just about landing the deal but all the follow-through that happens beyond that. I am sure you have heard—I have certainly heard in the past—that it does not matter what kind of government it is, of what persuasion, one of the difficulties is that if you are an investor, you come and make an investment, you land a deal, but then you have implementation issues beyond that. One of the things Invest SA is designed to do is not just land a deal but deliver on it as well as they move through the whole life of the project or the investment.

Mr COWDREY: I guess what I am getting at, minister, is: how is this anything other than just an administrative change?

The Hon. N.D. CHAMPION: You might make the assertion that it is an administrative change, and I would make the assertion that this is a different approach. I have just described how it is different. It is not just landing the deal. It is actually working with a company or an investor right the way through their project, giving them that intensive, if you like, attention and focus and making sure that that is not just one sector, one time, but really looking across the economy and making sure that if we have an investor and they want to make an investment in South Australia, that is facilitated.

It is not just that you get a deal, you facilitate it and you squeeze every last job out of it. You try to get every last dollar of investment out of it. You try to make it a good experience because I think if you have that intensive focus on investment, that breeds better outcomes in the longer term.

Mr COWDREY: What KPIs and accountability measures will Invest SA have?

The Hon. N.D. CHAMPION: I think page 120 of the Agency Statement, Volume 4, sets out the performance indicators for 2022-23.

Mr COWDREY: That is for the department.

The Hon. N.D. CHAMPION: That is for the department, yes.

Mr COWDREY: I am asking specifically in regard to Invest SA. You are saying it is different from the department.

The Hon. N.D. CHAMPION: No, if you look—

Mr COWDREY: So it is the same as the department?

The Hon. N.D. CHAMPION: If you look at the budget papers, if you look at the table of performance indicators, page 120 states, 'Foreign investment secured through Invest SA investment facilitation'. It is right there in black and white for you, so I do not quite understand why you are getting hot under the collar over there. It is pretty straightforward.

Mr COWDREY: I am perfectly relaxed, minister.

The Hon. N.D. CHAMPION: I sense some frustration. I do not want to frustrate you at all.

Mr COWDREY: I think you may be mistaken.

The Hon. N.D. CHAMPION: The table is there. I could read it into Hansard for you. As I said, 'Foreign investment secured through Invest SA investment facilitation, $750 million'.

Mr COWDREY: Over the forward financial years?

The Hon. N.D. CHAMPION: That is 2022-23.

Mr COWDREY: Yes. Is that imagined to be increasing over the forward financial years?

The Hon. N.D. CHAMPION: As I understand it, you do not set those targets in forward estimates, you just set them year by year.

Mr COWDREY: So you have no forward vision for Invest SA past this financial year?

The Hon. N.D. CHAMPION: The honourable member would understand that, in the current world environment, the trade environment, the energy markets environment, what is happening with freight and logistics across the world, in the same way I would not have asked the previous government to make a prediction about the future in 2019-20 or 2020-21—I think, at the moment, more than ever, there is geopolitical instability.

An example of that instability is the tariffs erected by China on our wine, barley and seafood industries, so I think it makes sense to set a target for 2022-23 and stick to that, but I will just answer your question because there was also, as part of those performance indicators, 4,000 new jobs through Invest SA investment facilitation, and then there is a range of other performance indicators for you to look at.

Mr COWDREY: Thank you for bringing my attention to that, minister, because I was about to bring your attention to them. You were telling me that Invest SA is different from the department, yet last financial year the target for foreign investment for the department was $750 million and the number of new jobs created for the department was 4,000, so you have simply shifted those targets from the department to Invest SA. Again, I ask the question: is this just an administrative change? What is different?

The Hon. N.D. CHAMPION: It is not an administrative change at all. If you look at the budget papers, the performance indicators, if you look at foreign investment into South Australia in priority sectors from companies that are direct clients of DTI, if you look at the 2021-22 estimated result it is $474 million. So even though those targets are not mentioned at all—

Mr COWDREY: But you did mention a pandemic a little bit earlier.

The Hon. N.D. CHAMPION: There are reasons for that. I am not trying to be partisan about it. I do not think there is much point in that. I am just trying to say to you—and I am sure you understand this yourself, because you would be getting feedback from the business community as well—it is a very volatile environment out there, in geopolitical terms, in trade terms, and there is a limited amount that the South Australian government or the Department for Trade and Investment can do about that.

We can set targets, we can take a new approach in Invest SA, we can make it our absolute laser-like focus to make sure that those companies and investors that want to come to South Australia and invest in South Australia and do business and create jobs can. We have put resources around it, we have put attention around it. As I said before, we have taken a new approach, and the proof will be in the pudding. I am sure we will be back at estimates in subsequent budgets and you will be holding me to account for those figures.

Mr COWDREY: Your main motivation, from what you have presented to this date, is that companies are not happy with their experience with the department as they come through, that you want to provide them with a better level of experience. Your own budget papers show that the estimated result for client satisfaction for those undertaking trade and investment opportunities has exceeded the target significantly and sits at 87 per cent. Do you believe that businesses are not being provided with adequate service from your department at the moment?

The Hon. N.D. CHAMPION: I think trade and investment is a broadly bipartisan endeavour and I think the department has done a good job over many different governments over a long time, and I simply want to add to that legacy. It is not a question of reflecting on the department. They do a very good job, very professional.

I admire their commitment to the Public Service and the administration of good government in our state, but we certainly want to allocate some money, $1 million per year, and we want to have a new approach in Invest SA, which as I said focuses very much on a longer period over which an investment is made. That will hopefully add to, as you say, those already very high satisfaction levels, but there is always room for improvement and we live in a competitive world, so we have to, as I said before, have a laser-like focus on these things.

Mr TELFER: Can you clarify for me: the targets are the same under Invest SA as they were last financial year for both jobs secured and foreign investment secured, so you are hoping that the targets will be more likely to be reached through a changing of process to a more intensive account management style?

The Hon. N.D. CHAMPION: The targets are the same. We have control over the approach that the department takes and what investments we make in the capacities of the department. Mr Reynolds is bringing a new approach, as a new chief executive, to the department. We have new leadership in the department, we have Invest SA as an election commitment that we have now fulfilled, and as I said before we have this more enhanced, more intensive account management approach that builds on what had been there previously.

The targets are the same, but of course the member for Colton before referred to the pandemic. The pandemic has not gone away. As you would know, certainly over 35 per cent of China's GDP was recently effectively locked down, its large cities were effectively locked down and there was a massive disruption in China's ports, which has affected the international freight market, both sea and airfreight. We might get into that later on, but to give you an example: our airfreight figures are not dissimilar to what they were pre-pandemic, but a lot of the airfreight is going out not through Adelaide Airport but through Melbourne Airport.

We set these targets—they are the same as last year—but we still face great turmoil in international sea and airfreight and we face great turmoil in trade relationships. We hope that many of those trade relationships get better, because I think the biggest effect that could occur is that they could get better. Equally, the government of the United Kingdom is currently considering, for instance, a volumetric taxation system which, if it was implemented in a particular way, might completely erase the benefits of the Australia-United Kingdom Free Trade Agreement for the wine industry.

There are things that are in our control, and I am here to answer questions about that today. There are clearly many things in trade and investment that are outside our control, and we are trying, as the previous government did, to negotiate that environment.

Mr TELFER: Does the minister believe, because of the change of tactic with more enhanced, intensive account management with business, that there are going to be other businesses that are left behind because the resources are put into the ones that are now having a more enhanced, intensive account management? Is the fulcrum of business that you will be able to work with going to be diminished because of this process of resource allocation within the department?

The Hon. N.D. CHAMPION: The short answer to your question is that we are not going to leave businesses behind. That is one of the reasons why we put additional resources in. However, the member would be aware that you always have to prioritise investments for their scale, for how many jobs they would produce, for the quality of the investment, for the sustainability of the investment. Often these investments run over a very long period of time—hydrogen is a good example of that; plant protein is a very good example of that.

Both those examples are running across not just our time in parliament, but I think when we see the true fruition of many of them we might all be out of politics by then. I do not know. They are certainly long-term investments. We are very confident that we can give a very good experience to investors and we can properly allocate resources to them, while also focusing on what will deliver the best outcomes for the state of South Australia.

Mr COWDREY: Do you imagine appointing an executive to head Invest SA?

The Hon. N.D. CHAMPION: I think the answer is that the leadership of Invest SA will come from existing staff within the department.

Mr COWDREY: I take you to Budget Paper 4, Volume 4, page 117, and investing expenditure, particularly around the Australian Space Park. Can the minister explain why there is no expenditure on the Australian Space Park project in the 2022-23 financial year?

The Hon. N.D. CHAMPION: The Department for Trade and Investment's role is to do the fit-out of the park, which is expected for machinery and equipment. That is expected to happen in 2023-24. The other component of the space park is obviously led by Renewal SA, which is up next. There might be a portion of it answered here and a portion of it that is answered in the next session.

Mr COWDREY: Is the expenditure forecast across the forward estimates new money or is it from an existing budget?

The Hon. N.D. CHAMPION: It is reflecting in the budget papers for the first time, but it was actually approved under the Modern Manufacturing Initiative under the previous government, and it is also tied to commonwealth money. There will be a commonwealth spend on top of our spend, and this just reflects on when that spending occurs as the park gets leased and then set up.

Mr COWDREY: So the federal component has not been allocated to the budget yet?

The Hon. N.D. CHAMPION: That is being negotiated by the federal department at this time.

Mr COWDREY: Sorry; with the federal department or—

The Hon. N.D. CHAMPION: We are negotiating with the commonwealth, but the commonwealth has control of its money—

Mr COWDREY: I am aware of that.

The Hon. N.D. CHAMPION: Obviously, state governments and federal governments often have to reach agreement on certain things—

Mr COWDREY: You have not made an allocation in this budget in terms of federal government money coming in. Is it reflected in the budget papers?

The Hon. N.D. CHAMPION: It is not reflected in these budget papers, but it will be once it happens. You will be the first to know.

Mr COWDREY: When do you expect those negotiations to wrap up?

The Hon. N.D. CHAMPION: We do not have a time frame on that at the moment. I am sure the commonwealth will provide us with a time frame in due course. I am grateful to the honourable member for raising it. I will raise it with the federal industry minister, Mr Husic, when I meet with him.

Mr COWDREY: Do you see any risk with the change of federal government that that funding will not come?

The Hon. N.D. CHAMPION: I think there is a high degree of bipartisanship in space, similar to defence. I have not had any indication that that has changed. As you would know with caretaker periods in federal elections, that can often delay things somewhat, but I have not had any indication that there is any issue here for the state of South Australia.

Mr COWDREY: How many jobs does the government believe will be created through the construction of the Australian Space Park?

The Hon. N.D. CHAMPION: So I am clear, are you talking jobs in the construction of the park or jobs that are in the park post that?

Mr COWDREY: That was my next question.

The Hon. N.D. CHAMPION: Okay.

Mr COWDREY: Either we can take the construction phase and then ongoing jobs, or if you want to take both on notice that is quite okay.

The Hon. N.D. CHAMPION: What I might do is take both on notice, but there are significant indications of private investment in the park already. If Renewal SA are listening to this it might give them an opportunity to give you some idea about what projections are made for construction.

Mr COWDREY: In terms of location of the Space Park, Adelaide Airport has been highlighted as a potential or likely location. Have you spoken to Adelaide Airport in relation to this since becoming minister?

The Hon. N.D. CHAMPION: I have met with Adelaide Airport. I think this issue was touched upon, but I have left it to Renewal SA and to the department to do all of the negotiations on it. I thought that was a more appropriate way of approaching the matter.

Mr COWDREY: Are there any other locations for the Australian Space Park being actively considered?

The Hon. N.D. CHAMPION: Obviously, these are commercial matters. As I understand it, we have always reserved our rights on the location of the park, and I think that is a sensible thing for government to do, but we are continuing on, broadly speaking, with the approach of the previous government on this matter.

Mr COWDREY: The minister highlighted FY 2023-24 as a potential construction commencement. Do you have any further detail as to when you would expect construction to commence in that financial year?

The Hon. N.D. CHAMPION: Just to be clear, the figure we were talking about before is for fit-out; it is not for construction. Construction will occur, and then fit-out, equipment and all that, and so it will be an involved process. That gives you some indication of the time line. There are some projections on jobs. The direct impact of the hub build and commencement is 650 jobs, of which there are some 296 direct and 354 indirect. That gives you some indication of the projections.

Mr COWDREY: You will still take ongoing on notice?

The Hon. N.D. CHAMPION: Yes, and that might have to be something that is updated as the project continues, because there might be slightly more or slightly less as the economic impact unfolds.

Mr COWDREY: I will just return to construction commencement. From my reading of what you said, FY 2023-24 was fit-out, so you would expect construction to be finished by then. That would indicate to me that you would expect construction to start in 2022-23, the coming financial year. Are you able to provide any further detail in regard to when you expect construction to commence?

The Hon. N.D. CHAMPION: Those questions might best be placed in the next session with Renewal SA.

Mr COWDREY: I am happy to ask it then, it is fine.

The Hon. N.D. CHAMPION: Fair enough.

Mr COWDREY: I refer to Budget Paper 4, Volume 4, page 119, wine export numbers. Is the wine industry being supported through the grants and subsidies programs administered by your department?

The Hon. N.D. CHAMPION: Through TradeStart, about 40 per cent of our client base are wineries, wine companies. It is a key export for South Australia. We are the biggest player in the wine industry across Australia. It is a significant exporter, manufacturer and key part of our state's industry, so we are very committed to assisting them. Obviously, there is also the wine expansion and diversification program that was put in place by the former government in, I think, response to the tariff barriers that were erected, which obviously have a very large effect on our industry.

Mr COWDREY: So they are the only two specific programs?

The Hon. N.D. CHAMPION: There is also the global expansion program.

Mr COWDREY: Are these existing schemes or new schemes?

The CHAIR: All three of those are existing. TradeStart has been a program in partnership with the commonwealth that has existed for decades. That has a strong bipartisan approach. Anything that lasts for decades shows that it is of great value. We met with winemakers in the South-East, some from Wrattonbully, which is a wine district near the Coonawarra, and obviously with the Coonawarra wineries as well, and talked about the issues around trade barriers in particular and its effect on the wine industry and grape growers. We are acutely aware of the attention and assistance they need.

Mr COWDREY: What was the maximum amount of funding available for each of these three schemes last financial year, FY 2021-22?

The Hon. N.D. CHAMPION: Do you mean the maximum per exporter or what was allocated?

Mr COWDREY: The funding allocation for each one.

The Hon. N.D. CHAMPION: I might have to take that on notice.

Mr COWDREY: What other funding allocations are there for each of those schemes for the coming financial year, 2022-23?

The Hon. N.D. CHAMPION: I might take that one on notice as well.

Mr COWDREY: Have there been any changes in the allocation of any of those funds between financial years?

The Hon. N.D. CHAMPION: There will be some changes going forward. The wine expansion and diversification program was put in place in response to the situation of trade barriers being erected in the largest market we had, China. That was always going to be a program that changed and evolved over time in response to the circumstances. It was put in place to address the challenge of that market. Clearly, that circumstance has not changed, but we will be looking at all of these programs accordingly.

Mr COWDREY: Are you aware of the extent of the changes? How much are you cutting out of the wine export and diversity program?

The Hon. N.D. CHAMPION: There was always going to be a decline at some point as the wine industry evolved to deal with that issue of very sudden change in the Chinese market. But we will get back to you. Perhaps we will take the rest of question on notice and provide an answer.

Mr COWDREY: Was that decision taken on the back of the savings task allocated to the department?

The Hon. N.D. CHAMPION: As I said before, we are still reviewing everything to best allocate resources, but the previous government always anticipated that program would take a downward path as we dealt with the particular challenge of the Chinese market and as wine companies were able to diversify to alternative markets.

Mr COWDREY: Has the minister suggested to the industry that they may need to match funding on a one-to-one or fifty-fifty contribution basis?

The Hon. N.D. CHAMPION: I have had some meetings with representatives of various wine companies and I cannot recall that ever coming up.

Mr COWDREY: Minister, if, as you say, nothing has changed in regard to the wine tariff situation, why would you be making changes now? Do you not believe that the industry needs the continued support?

The Hon. N.D. CHAMPION: Clearly, this was a suitable response by the previous government to deal with a sudden change in international markets, in particular our biggest market. It was worth roughly $800 million. I should get my figures right. It fell $733 million between calendar year 2020-21. It fell from $795 million to $21.5 million, which is a very dramatic drop in a single year. So this program was put in place to help wine exporters find alternative markets.

Realistically, China was a unique market and could not be replaced by any government of any persuasion in Australia. There was always going to be a period when the industry had to adjust, and this program was there for them to adjust. As they adjusted, there would be a drawdown, and that was anticipated by the previous government, unless the honourable member is telling me that the previous government put this in place as a permanent feature.

Mr COWDREY: But is the industry not about to be hit by another issue regarding the tariffs that were recently introduced by the UK? Are you able to give us an indication of what impact you expect that will have on the wine industry?

The Hon. N.D. CHAMPION: I certainly would not predict the deliberations of the government of the United Kingdom or the House of Commons. I know the Agent General and our office in London are paying close attention to this. I have raised it with the consul general from the United Kingdom because the government is concerned that the benefit from the free trade agreement will effectively be cancelled. It is a different circumstance from China, where we had a pretty established market and it disappeared overnight.

What we are talking about here is we have a benefit out of a free trade agreement that might then be erased, mainly for red wines, I might add. It does not affect whites so much because the volumetric taxation goes on alcohol. We are famous for big, bold reds, particularly from the Barossa and other places. The situation in the United Kingdom is somewhat different. In any event, South Australian wine exports to markets outside of China have increased by 17.9 per cent for the year ending March 2022.

The industry itself understands that it had to respond to the trade barriers that were erected and find alternative markets. This program was there to assist them. We are going to continue to assist them, but they are already finding new markets. I would not say it has been an easy time for the industry, but industries do respond. We also had tariffs on barley. That was a commodity that very easily and very quickly went to alternative markets, so it is less of an issue. We know for our seafood exports, that also has gone to other markets—

Mr TELFER: Not all of them.

The Hon. N.D. CHAMPION: Not all of them, but some of them. We know it ultimately ends up in one market. It is just going alternative routes.

Mr COWDREY: Where does the UK rate in terms of export markets of wine from South Australia?

The Hon. N.D. CHAMPION: I will take that on notice and get the precise figures, but it is high, along with the United States and, previously, China.

Mr COWDREY: Does it factor in the top five wine export markets?

The Hon. N.D. CHAMPION: The program that we have focuses on the following established markets: United States, United Kingdom and Canada.

Mr COWDREY: Minister, I am simply asking—

The Hon. N.D. CHAMPION: I will get those figures for you. In the developing world, we are focused on Japan, South Korea, Hong Kong, Singapore, Malaysia and New Zealand. In terms of emerging: the Gulf States, United Arab Emirates, Thailand, Vietnam, Scandinavia, Western Europe and India. There were 25 wine recovery initiatives over 2022-23 and 19 projects delivered in the previous year.

Mr COWDREY: Are you planning on answering the question?

The Hon. N.D. CHAMPION: I said I will take it on notice and provide you with the specifics. I said that at the beginning of my answer. I was just trying to give you information.

Mr COWDREY: I am not sure if that was relevant to the question. Minister, will the government continue trade relationships via e-commerce and retail initiatives with the US, UK or any other international trade locations regarding wine?

The Hon. N.D. CHAMPION: When you say e-commerce, are you talking about the virtual matching program? Is that what you are talking about?

Mr COWDREY: Yes.

The Hon. N.D. CHAMPION: The virtual business matching program was a response by the previous government to the pandemic, to all international travel being locked down, to companies not being able to do face-to-face wine tastings.

Mr COWDREY: You can just say no, if that is the answer.

The Hon. N.D. CHAMPION: Steady.

The CHAIR: Give the minister an opportunity to answer the question as he so wishes.

The Hon. N.D. CHAMPION: I am doing my best to—

Mr ODENWALDER: Start again.

The Hon. N.D. CHAMPION: I could start again. It is a response to a particular set of circumstances that no longer exist and, I might add, there are private sector applications that would be easier for wineries to use. So why would we continue a program that was pandemic-related and that, now, the wine companies themselves have more than adequate ability to access anyway? I think it would be strange to continue such an arrangement.

Mr COWDREY: I take you to Budget Paper 4, Volume 4, page 118. What is the status of the Port Bonython project?

The Hon. N.D. CHAMPION: Port Bonython is being handled by the Treasurer and the Minister for Infrastructure and Transport. The Department for Trade and Investment's role is to facilitate those who might want to invest in it, so you would have to ask about the status of the project in Minister Koutsantonis's estimates. It is a whole-of-government role, but our role is to use Invest SA to case manage those who want to invest in that very important project and to facilitate what is happening there.

Mr COWDREY: So the government will be using Invest SA to attract investors to the hydrogen hub project?

The Hon. N.D. CHAMPION: In the same way we would use Invest SA to attract investors in any industry where it delivers investment, jobs, sustainable outcomes and, in this case, clean energy. It is an extraordinarily important opportunity for the state. You would have heard the Premier, the Treasurer, the Minister for Infrastructure and Transport and myself talk about it many times because it is a very important opportunity for this state and one that we do not intend to miss.

Mr COWDREY: I believe the latest advice was that there were seven short-listed projects for the Port Bonython land. Is the minister in communication with any other companies or interested parties to participate or invest in the Port Bonython project?

The Hon. N.D. CHAMPION: That is being managed by the Treasurer and there are probity arrangements around it. I am advised that we are unaware of any other arrangements in place.

Mr COWDREY: To be clear, DTI's role is to manage investors coming in the door and then they are simply straightaway transferred to Treasury. Where is the intersection between DTI's role, Treasury's role and Renewal SA's role?

The Hon. N.D. CHAMPION: There is the construction of the project and the probity arrangements around that, which are all run by Treasury. When individual companies want to make investments, that is when the department would step in and take that account management role. Port Bonython is a very important project and you expect it to have the government's full attention. That is why the construction section of it is in Treasury and sits with the Treasurer.

Mr COWDREY: I take you to Budget Paper 4, Volume 4, page 116. I am just going to walk through a series of questions in regard to trade offices. Will there be any other trade offices that will be closed?

The Hon. N.D. CHAMPION: There are no plans to close posts. Once posts are established, of course, you have a lease, you have a person employed, and at that point a post becomes very valuable. Certainly, I would be very reluctant to entertain notions of closing any posts that currently exist, because I think you get a measure of value once a post is established, once you have a person in place. Where it has been in place for some time, you do get a great deal of value out of it, and by removing it you do not necessarily get a corresponding saving. I think our current trade office network will be the same at the next estimates as it is today.

Mr COWDREY: Will the government be investing in any new offices?

The Hon. N.D. CHAMPION: That has not been entertained by the government.

Mr COWDREY: Are you able to provide to the committee a copy of all trade office leases?

The Hon. N.D. CHAMPION: I might take that on notice. There are some arrangements with the commonwealth through DFAT and our embassies, and obviously there will be different arrangements at different places. I might take that one on notice.

Mr COWDREY: In the absence of being able to provide that answer, if you could provide us with the expiration of leases.

The Hon. N.D. CHAMPION: The expiration of leases?

Mr COWDREY: If you are not able to provide us with a copy of the lease, can you provide us with the information relating to the expiration of those leases?

The Hon. N.D. CHAMPION: I just say to the member for Colton, I do not think that it is in the state's interest for the public release of leases because they are commercial arrangements. We will take that on notice and we will look at what is an appropriate level of information to give you.

Mr COWDREY: The high-level detail is all that is being asked for, the expiration of those lease agreements.

The Hon. N.D. CHAMPION: Okay.

Mr COWDREY: Are you able to outline for the committee any movement in the head count from trade offices?

The Hon. N.D. CHAMPION: Do you want me to read them in?

Mr COWDREY: Please.

The Hon. N.D. CHAMPION: For Shanghai there are two staff; Tokyo, two staff; Guangzhou, one staff; and New York, one staff. The following all have one staff: Seoul, New Delhi, Singapore, Houston, Dubai, San Francisco, Hong Kong, Jinan and Kuala Lumpur. The OAG London has seven staff.

Mr COWDREY: Have there been any movements or are there budgeted to be any movements in the coming financial year?

The Hon. N.D. CHAMPION: No.

Mr COWDREY: What are the budgets for each of the trade offices that you just read out, for financial year 2022-23?

The Hon. N.D. CHAMPION: Shanghai, $671,979; Tokyo, $1,062,335; Guangzhou, $166,680; New York, $427,660; Seoul, $393,046; New Delhi, $243,649; Singapore, $440,430; Houston, $445,797; Dubai, $347,017; San Francisco, $292,871; Hong Kong, $451,734; Jinan, $175,583; Kuala Lumpur, $210,666; and the OAG London, $1,430,011. They are similar numbers across previous years as well.

Mr COWDREY: Budget Paper 4, Volume 4, page 119: we will just finish quickly on a couple of questions relating to Brand SA. How many FTEs will be assigned to Brand SA?

The Hon. N.D. CHAMPION: Brand SA is a very important program. It is an election commitment and an important one, and there are thousands of business that have used Brand SA. It is a very popular thing out there in industry and the community. In the future I hope it has bipartisan support. The key step is to set up an advisory board that will help us engage with industry on how Brand SA evolves over time. As part of that evolution and part of the setting up of the advisory committee we will be allocating staff to it. I do hope that, once it is set up, once it is re-established—because it was a very important asset to our state—it gets bipartisan support into the future.

Mr COWDREY: Budget Paper 4, Volume 4, page 118, regarding the Agent General: will there be any changes to that particular position in terms of tenure, position or any arrangements at all?

The Hon. N.D. CHAMPION: The Agent General reports to the Premier. His office reports to the department, but the Agent General himself reports to the Premier. That is a relationship between the Premier and the Agent General and I would not dare impose upon it. If you have questions in that regard I suggest you make them to the Premier in future estimates.

Mr COWDREY: Back to Brand SA, what are the targets attributed to Brand SA and how will they be measured?

The Hon. N.D. CHAMPION: One of the key things we are keen to do is to do a 'buy local' campaign and encourage South Australians to switch $1 in every $20 to spending on local products. We are very fortunate in South Australia to have an independent supermarket sector, and a dynamic one. They have a very different offering to Coles and Woolies; not to knock Coles and Woolies but Coles and Woolies sometimes think they are real estate companies where they charge manufacturers for what they put on the shelves.

Our independent supermarkets in South Australia really do operate as 'super' markets. They provide shelf space for local products, and that is why South Australians like to go there. I hope Coles and Woolies do the same thing, as well as Aldi and everybody else, and look at their business model and give local manufacturers a go.

What this is all about is encouraging South Australian consumers to make that choice. If you can go with a South Australian product then do that, and if you can pay a bit more for it that is even better. If you can help those companies climb the value chain that is even better, and focus in on it being local, on it being quality, and on it providing jobs and investment to South Australia.

The CHAIR: Thank you, minister. The time allotted having expired, I declare the examination of the portfolio of the Department for Trade and Investment completed. I thank the public servants for all their work leading up to their appearance before the committee.

Sitting suspended from 10:31: to 10:45.