ROYAL ZOOLOGICAL SOCIETY OF SOUTH AUSTRALIA

The Hon. P. CAICA (Colton—Minister for Environment and Conservation, Minister for the River Murray, Minister for Water) (14:17): I seek leave to make a ministerial statement.

Leave granted.

The Hon. P. CAICA: Earlier this year the government became aware that the Royal Zoological Society of South Australia was experiencing financial difficulties. Since that time, the state government has continued to work with the zoo to identify ways in which to assist it back into a sustainable position. The society is a non-government, not-for-profit organisation that is governed by a volunteer board on behalf of its members. The society operates three sites: the Adelaide and Monarto zoos and Warrawong, each being unique in their own way. Adelaide Zoo is the only major metropolitan zoo in Australia not run and owned by government. Monarto Zoo is the largest open-range zoo in the world.

The society's incorporated body is run by a board made up largely of people elected by the membership, with provision for the Governor to appoint up to three board members. The society produces an annual report and is the subject of an audit each year by the society's auditor.

Both zoos are institutions that not only are much-loved by many thousands of people but also undertake important animal, environment and conservation work and are tireless in their efforts to protect endangered wildlife, both here and across the world.

In 2008, the society and the commonwealth government entered into negotiations with the Chinese government to house two giant pandas, Wang Wang and Funi, for a period of 10 years at a cost of $10 million, to be paid by the commonwealth government. The society made a decision to seek government and private support to build an appropriate panda enclosure and to develop a new front entrance to cater for an expected increase in visitor numbers, and a new external wall for greater security and protection of animals.

The society developed a business case, based on it being able to raise funds through events, fundraising activities, increased membership and a surge in attendances. The state government contributed $18.9 million as a one-off capital grant to help build the new front entrance facility and external wall. The capital grant, the largest ever given to the zoo, was in addition to the $3.126 million in operating funds granted by the state government annually.

As at 31 March 2011, the society had a Westpac debt of $24.4 million, an amount larger than it originally intended borrowing. I understand the reason for this was, in part, because the amount the zoo had hoped to raise in private sponsorships fell well short of projections, largely due to the effects of the global financial crisis. The government has recently been informed that while the pandas have indeed attracted many more people through the zoo's gates, including from interstate and overseas, and its revenues have increased in the form of a rise in sponsorships, memberships and events, these revenues have not been able to match the increase in the zoo's operating expenses.

As a result, the state government is now working with the Royal Zoological Society of South Australia to build a framework for a long-term sustainable business model. In the interim, the state government has advanced $2 million of the 2011-12 allocation to the zoo, which will help to ensure its operations. The government in the meantime is prepared to assemble a review team to work with the zoo board, and its management, and Westpac, to assess the critical issues which led to the financial difficulties and develop a framework that will lead to restoration and maintenance of an appropriate financial base at the zoo and the implementation of practices aimed at preventing these circumstances arising again.

I am advised that Westpac has established its own financial review to also assess the critical issues that have given rise to the current financial difficulties. The government is obliged to ensure taxpayers' money is protected, with appropriate controls on future operations and investment decisions. In the interests of the protection and care of wildlife, public education, important conservation programs and the hundreds of zoo staff and volunteers, as well as its viewing public, this government is committed to working with the society to help it through its current problems, and to re-establish a sustainable operating position for the zoo's long-term future.

Ms Chapman interjecting:

The SPEAKER: Order, member for Bragg!