Bills

State Procurement Repeal Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General, Minister for Planning and Local Government) (15:46): As I was saying, I am pleased to confirm to the house that the local industry have indeed taken on the new model of module buildings for the schools that is operated by Sensum from Victoria. I am advised, only as recently as this morning, that we now have the expertise in South Australia. I do not know what the arrangement is as to whether there is any intellectual property surrounding this particular model.

But, in any event, our local people have developed the skills and understanding to be able to implement this type of module work, which can quickly address an infrastructure issue, particularly, as I understand it, for classrooms for schools, and that is great because it means in future they will be available to tender for this work. Notwithstanding the criticism of the member for Lee as to the use of an interstate company, which has this innovative model for the school buildings, we have moved to ensure that there is support for the industry to develop the skills, and that is precisely what they have done.

Probably, the commentary made by the member for Lee on the attempted privatisation of SA Pathology, as he claims, is quite the reverse. It was the previous government who had raided the IMVS, which was an internationally renowned institution. They had sold off entities, including Medvet at that organisation. They had sacked the board, bought in-house pathology and had tried to keep the income stream in relation to pathology work in-house. Under their leadership, they even failed at that.

It was this government that worked with SA Pathology to enable them to be competitive, to be able to provide a continued good service and to be able to continue to provide that in a manner that has, I think, been applauded around Australia in support of the COVID crisis. I think the member for Lee must have a very short memory and seems to be a little bit distorted in relation to the facts. Of course, it was his former government that was the master of privatisation, and one has only to look at the debacle surrounding the sale of the Lands Titles Office.

I say that not because of Land Services SA, which was the ultimate purchaser of that stream of data, which of course is necessary for the conveyancing world amongst others, but because the previous government, under the leadership in the treasury of the Hon. Tom Koutsantonis, refused even to disclose that contract after it was signed. We found after the change of government that there was a little extra bit added, and that was the right of that company—for decades—to be able to have exclusive access to the purchase of other data that a government may be minded to sell.

It came with a nasty little sting that meant that, if any new government did not do that, they would have to pay back some $80 million to the purchaser under that agreement. This is the sort of disgraceful conduct the previous government were involved in, with no transparency, no disclosure, having to find these little poisonous chestnuts when we get into office.

But I suppose if one were to take advice from the previous government, one would do so with great caution given their precedent set in the behaviour in the Gillman inquiry and the sale of that land—avoiding any proper scrutiny, not going to the open market, doing a side deal and being caught out—of which Mr Bruce Lander QC had scathing commentary to make in relation to his extensive report subsequent to those proceedings.

The SPEAKER: I sense that the Attorney might be moving on, and I might be a bit belated, but I do remind the Attorney and all members to avoid referring to members by name. A reference earlier might more appropriately have been to the member for West Torrens.

The Hon. V.A. CHAPMAN: Thank you, sir. I was trying to put him in the context of his previous title as Treasurer, but I certainly heed your advice in that regard. In any event, there are two other pieces of information that I think are important to identify here. There were two reports that had advised and helped us as a new government to make a decision to go down this course, which, we have heard from the opposition, they refused to support.

One was the report and recommendations of the Productivity Commission of South Australia. Two responses were published by the government on stage 1 and stage 2 in response to that. I think the dates were circa 2019. In any event, subsequent to the Productivity Commission's inquiry, the Statutory Authorities Review Committee of this parliament also published their report, titled 'Inquiry into the State Procurement Board', on 24 September 2019. From my recollection, it was some months earlier that the Productivity Commission had published their report. They are both consistent in their message, and that is that the structure we have under the current act, which we are proposing to repeal, is clearly outdated.

It was not as though the Statutory Authorities Review Committee was somehow or other stacked with members of the government who would, perhaps at first blush, be expected to support this proposed legislation. Two members of that committee, the Hon. J. Hanson MLC and the Hon. Irene Pnevmatikos MLC, Australian Labor Party members of that committee, without dissent—that is, no published dissenting report—made recommendations that led to this legislation. Perhaps they did not get the Mullighan memo, I do not know, but they clearly took a very different view as to—

The SPEAKER: I anticipate the member for Lee on a point of order.

The Hon. S.C. MULLIGHAN: I am not sure if it was through negligence or incompetence, but the member for Bragg inadvertently used my name rather than my title.

The SPEAKER: I sensed that that was a reference to the member for Lee and, again, I remind the Attorney to refer to members appropriately.

The Hon. V.A. CHAPMAN: Perhaps the member for Lee has instruction in relation to what his party's position is on this bill, which is to oppose it. Notwithstanding that, they were party to a report published on 24 December 2019 in this parliament, which was to outline the reasons why we need a new model. It was not as though the previous government had not been clearly alerted to how inefficient this whole process was. The same committee had provided a report on an inquiry into the board back in 2015.

They had given five recommendations in that report, obviously outlining the concerns about how this outdated model was no longer appropriate. They had indicated recommendations to assist the government of the day to be able to modernise and provide a robust structure in relation to future procurement with the transparency that goes with it. But it seems as though they did not listen. In fact, the 2019 report records:

The then Treasurer, the Hon Tom Koutsantonis MP, did not accept the Committee's recommendations in relation to amending the composition of the Board…

The report goes on to say:

The Committee, despite its earlier efforts, was concerned that the current procurement framework in South Australia continues to fall short in achieving the required balance between securing value for money for the State, with ensuring local businesses are given sufficient opportunities to secure State Government contracts, and queried whether the Board was performing adequately in relation to its statutory functions.

It goes on to say:

The Committee finds that the State Procurement Board is currently not in a position to adequately achieve its functions and to enable the necessary balance required for local business participation in Government tenders and providing value for money for the State.

I do not know how clear it had to be, but this report, which followed the Productivity Commission's report, with Labor members in it, was sending a very clear message. As a new government, we listened to that and we have acted on it and we are wanting the parliament to support a modern, robust, effective, efficient framework for the purposes of procurement in this state.

I also make mention of the committee's assessment in relation to the important role that Mr Nightingale plays as the Industry Advocate. The member for Lee also mentioned this in his contribution, but again I would urge the member for Lee to have a look at this report because it says:

The Committee sees a need to respond to the wide-spread lack of confidence in the IPP being applied correctly at State Government agency level, and the Committee questions whether it is sufficient in its current state to allow for the increase in local business participation in winning State Government contracts...

So in 2015 the previous government had been alerted to the need to do this. We have a new report, which includes Labor members, which again identifies the weaknesses in relation to this framework and provides the parliament with the recommendations to actually do what we are doing in this bill. And yet still the member for Lee comes in and says, 'The opposition is opposing this because we haven't got enough clarity about what they intend to do as a government.' Well, I would urge the member for Lee to also look at the reports of the state government's response in relation to the Productivity Commission, and I am just going to list a few. In relation to improving procurement in the short term, the document commits on page 5 to:

Simplify the process through delegation

Improve guidance on value for money

Improve agency engagement with businesses

Improve reporting and analysis of the value delivered from procurement

Build capability in procurement across government.

In relation to the question of the South Australian Industry Participation Policy, which is what I referred to earlier, the government has committed to:

Provide better information on the performance of the SAIPP

Increase the capacity of businesses to compete in government procurement

Complete the development of a pre-registration system for businesses and not-for-profit organisations

Simplify the Industry Participation Policy to reduce tape and unnecessary costs to businesses and agencies.

I do not know how clear we have to make it, but it is pretty clear from this published material precisely what the government is committed to do and we want to get on with it. For completion, for procuring services from the not-for-profit sector, we have committed in writing to:

Evaluate the implementation of the NFP funding policy

Improve guidance for agencies on quality assurance accreditation for procurements involving the NFP sector

Review adequacy of current tendering timeframes in procurements involving NFPs

Determine appropriate exemption criteria in the SAIPP for NFPs

Remove disadvantages to NFPs due to the way they are incorporated.

All these sit with recommendations that the government has endorsed. If the member for Lee has not read them, perhaps he ought. I would encourage him to do so and report back to his party room about the importance of having this reform and ensuring that we have a much better procurement policy framework to be able to deal with 21^st century procurement.

The member also made comment about his concern about the abolition of Brand SA and the Economic Development Board. I do not know whether the member has noticed, but there has been a change of government. We have a commitment to making South Australia a strong, thriving economy again. We want to have a fair, transparent system. We want to be able to identify how we can best advance the South Australian brand and there are a number of advisory groups that have been established that we think can assist in a more effective manner.

In relation to Mr Darren Thomas, I do not know whether the member for Lee thinks that everything started back in the 1980s, but the reality is that T&R have been a major pastoral support company in this state for decades, that is, Mr Thomas and Mr Bob Rowe, the latter of whom I am aware is deceased. Darren Thomas operates a very good business in South Australia of which we are all proud. In fact, the government made recent announcements towards the support of infrastructure for the rebuild of the Thomas Foods abattoir in Murray Bridge. This government will be making every effort to ensure that we support our livestock industry and that it is up and running as soon as possible.

So, yes, this government will continue to support a major industry for South Australia and we will continue to make sure that we have the structures of excellence that go with it. I commend the bill to the house and urge members to support the same.

Bill read a second time.

Third Reading

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General, Minister for Planning and Local Government) (16:04): I move:

That this bill be now read a third time.

Bill read a third time and passed.