TIGER AIRWAYS

Mrs REDMOND (Heysen—Leader of the Opposition) (15:46): My question is to the Treasurer. What was the total cost to the taxpayers across all government departments of attracting Tiger Airways to establish a base in Adelaide? Budget estimates was told on 4 July that the departments of trade and economic development and tourism gave $3.15 million to Tiger Airways, but the government's original pitch to attract Tiger Airways entitled 'Case for Adelaide: Tiger Airways' offered $10 million, comprising $7 million in the support package and $3 million of additional money from the Regional Development Infrastructure Fund.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Mineral Resources Development, Minister for Industry and Trade, Minister for Small Business, Minister for Correctional Services) (15:47): Madam Speaker, I can see the member for Waite's little heart dying, because this is his question; it got taken off him, and he is so upset—

An honourable member interjecting:

The SPEAKER: Order!

The Hon. A. KOUTSANTONIS: —he is so upset, but I will give the answer as if he had asked it. No deal worth $10 million was ever agreed to for Tiger Airways. Of course—

The Hon. P.F. Conlon interjecting:

The Hon. A. KOUTSANTONIS: Details aren't important, Madam Speaker.

Members interjecting:

The Hon. A. KOUTSANTONIS: Oh, the little heart is breaking again. 'That was my question. It should've been my question!'

An honourable member: She took it off you, Martin.

The Hon. A. KOUTSANTONIS: She took it off him. That's okay. He had all day in estimates; but I'm with you, brother. $2.25 million was provided—

Mr Whetstone interjecting:

The Hon. A. KOUTSANTONIS: What did you say? Speak English?

Mr Whetstone: Yes.

The Hon. A. KOUTSANTONIS: I do speak English, and if you are making a reference to my Greek heritage, I am proud—

Members interjecting:

The SPEAKER: Order!

The Hon. A. KOUTSANTONIS: —of my Greek heritage, and I will not take offence from someone like you. Perhaps you should go back to the Riverland and speak to people there of Greek heritage and see what you say about them. It is an outrageous attack.

Members interjecting:

The SPEAKER: Order!

The Hon. A. KOUTSANTONIS: Madam Speaker, $2.25 million was provided to Tiger—

Members interjecting:

The SPEAKER: Order!

The Hon. A. KOUTSANTONIS: $2.25 million was provided to Tiger on the basis that it would establish its second base in Adelaide. The money was paid in two instalments: $1.7 million in April 2009 and $550,000 in February 2010. This arrangement required Tiger to have a minimum of two planes based in Adelaide, increasing to four planes in a designated period. Tiger wrote to me on 21 June stating its intention to reduce this number to one plane from August 2011. Tiger then asked for a variation of the contract to allow for this arrangement. That offer was declined by the government.

The process of recouping the money through the South Australian Government Financing Authority (SAFA), has commenced. As I said in estimates the day before yesterday, the government will be pursuing Tiger. Indeed, in my negotiations with Tiger, they accepted that they are in breach. There is no question of their breach; they accept it. Now SAFA—

Mrs Redmond interjecting:

The Hon. A. KOUTSANTONIS: I'm getting to that. They will pay the money back. SAFA is pursuing them to pay the money back. All payments were made by the South Australian Tourism Commission to Tiger on behalf of the airline attraction fund, a joint initiative of the Adelaide Airport authority, DTED and the SATC. An eight-year agreement was prepared in February 2009, being an annual performance-based incentive agreement to be paid in arrears at 30 June each year to Tiger for having multiple daily flights and multiple source locations. The maximum payable in any given year was to be $500,000.

These payments were made for services rendered, so there is no clawback required in those areas, but the $2.25 million that was agreed to in the contract will be clawed back and the taxpayer has been protected.