Ministerial Statement

ROYAL ZOOLOGICAL SOCIETY OF SOUTH AUSTRALIA

The Hon. P. CAICA (Colton—Minister for Environment and Conservation, Minister for the River Murray, Minister for Water) (14:02): I seek leave to make a ministerial statement.

Leave granted.

The Hon. P. CAICA: Last month I informed members of the financial challenges faced by the Royal Zoological Society. The society is an incorporated body that runs the Adelaide and Monarto zoos in South Australia. The society itself is run by a board comprised of elected members, as well as up to three members nominated by the Governor, which has been a longstanding provision in the society's constitution.

The government provides an allocation of $3.126 million each year to the society to assist in running the zoos. This operational funding recognises their importance to the public of South Australia and their considerable tourism value. As previously indicated, I was advised earlier this year that the society was having difficulty managing its cash flow and that it had a substantial debt. The society sought assistance from the government with its cash flow position.

Subsequent to the resignation from the board of the two existing Governor's nominees earlier in the year, two more senior government officers—one from the Department of Environment and Natural Resources (DENR) and the other from the Department of Treasury and Finance—were nominated to the board to assist the society in the short term to deal with its financial challenges while greater clarity was sought.

The government responded to the zoo board's request for assistance with cash flow by bringing forward $1 million from the society's allocation in 2011-12. At the same time, the government conducted an independent review into the current state of the society's finances to determine if further action might be required. This review suggested that the society's financial difficulties were more substantial than previously recognised and recommended the provision of a further $1 million to give stability to the society's financial position and consideration of the long-term position of the zoos.

As circumstances are involved, and as foreshadowed in my statement of 21 June, I advise that a government working group has been established with the agreement of the society's board to work with the society in respect of its current financial challenges and the future sustainability of the zoos.

The working group comprises senior officers from the Department of Environment and Natural Resources, the Department of Treasury and Finance and the Crown Solicitor's Office. The working group will report to the Chief Executive of DENR and the Under Treasurer, and will assess the critical issues which led to the zoo's financial difficulties and develop a framework that will aim to restore and maintain an appropriate financial base at the zoos.

This will include examining appropriate government contributions and putting in place mechanisms to avoid these circumstances arising again. It will also consider appropriate governance arrangements for the society's board. Given that the zoo has accepted the government's offer to play a more active role in helping them to deal with the zoo's financial difficulties, the most recently appointed Governor's nominees to the board have now resigned their positions, so that they can serve on the working group. This is in line with good governance principles.

I have been advised by the president of the society that he and his chief executive have entered into discussions with Westpac Banking Corporation about the debt facility that the society has with Westpac. The society's debt with Westpac is a matter for the bank and the society, and the government trusts that they will reach a suitable arrangement that will allow the society to move to a sustainable position. The government's commitment to working with the society for the long term sustainability of the Adelaide and Monarto zoos remains strong.