Auditor-General's Report

Auditor-General's Report

In committee.

(Continued from 3 November 2022.)

The CHAIR: I declare the examination of the Report of the Auditor-General 2021-22 open. I remind members that the committee is in normal session. Any questions have to be asked by members on their feet and all responses are given by ministers on their feet. Questions must be directly referenced to the Auditor-General's 2021-22 Report and Agency Statements for the year ending 2021-22, as published on the Auditor-General's website. I welcome the Minister for Transport and Infrastructure and also the member for Hartley. I call for questions.

Mr TARZIA: Thank you, sir. Good afternoon, minister. I refer to the Auditor-General's Annual Report, Part A: Executive Summary, page 53, figure 9.2, where it talks about the Torrens to Darlington leg. It reads: '$151m Original budget' to '$256m Actual'. Obviously, there is significant disparity here; some would even call it a significant blowout. Are these figures the minister's latest understanding of the current costings?

The Hon. A. KOUTSANTONIS: I cannot win with the shadow minister: either we are not spending enough and getting on with it on the north-south corridor or now we are spending too much. Perhaps if my young Padawan learner would turn to page 54, he will see the second point which says, and I quote:

The North-South Corridor (River Torrens to Darlington) project spent $256 million in 2021-22. This was $104 million over budget. DIT advised [the Auditor-General] that this increased expenditure was due to earlier than anticipated finalisation of the acquisition of some properties required for the project.

Given that the member is saying he was aware of this dot point, it would make one wonder why he would say is this a blowout, unless he is perhaps questioning the validity of the Auditor-General's observations. No, he is not. Here endeth the lesson.

Mr TARZIA: I refer to the Auditor-General's Annual Report, Part A: Executive Summary, page 15, dot point 4.2, 'Authorised access to Cabinet records'. I note that the Auditor here refers to 'significant problems in accessing documentation from government agencies related to Cabinet submissions'. Minister, was your office one of those agencies?

The Hon. A. KOUTSANTONIS: This is a decision of the cabinet. I fully support the decision. The Westminster tradition enables us to make those decisions in a room where we can debate openly and freely and run good executive government. My advice to my friend the shadow minister is that, when he ultimately achieves executive office, this is a principle he should embrace—that is, that executive discussions within the executive should be done in secret. That is how they should be done, and the decisions of that room are then announced publicly.

The deliberations of cabinet should be for cabinet only. That has always been the principle of our Westminster democracy. It has got our federation from 1901 to here using that principle. The commonwealth government has, I think, privacy provisions for 30 years before it releases its cabinet documents; in South Australia, it is 10. There was a process also that the previous government did not release every document sought after by the Auditor-General, and I support that. Every cabinet will make its own decisions about what documents it releases, and I support that.

Mr TARZIA: Minister, referring to the same line, can you confirm whether or not your ministerial office was approached by the Auditor-General to request documents?

The Hon. A. KOUTSANTONIS: The advice I have is that all those requests are made directly of the Cabinet Office rather than individual agencies, but I will double-check that and get back to the member for a prompt response; however, if the Auditor-General had asked me my response would have been no.

Mr TARZIA: I refer to the Auditor-General's Annual Report, Part A: Executive Summary page 11, and figure 3.2, 'Grants to sporting clubs and local infrastructure projects as a result of election commitments'. Did the minister personally approve of any of these local infrastructure grants?

The Hon. A. KOUTSANTONIS: I think I have. I will have to get back and check which ones I authorised. I understand there were a couple that I authorised. I cannot remember which ones they were, but I will check that and get back to the member.

Mr TARZIA: I refer to the same line. Did the minister delegate the approval of any of these grants; if so, to who?

The Hon. A. KOUTSANTONIS: I delegated the execution of all the grants to the CE, and the deputy CE or the executive director where possible, to execute the grants, but the decision-making process was made by cabinet.

Mr TARZIA: I refer to the Auditor-General's Annual Report, Part A, section 3. Minister, are you able to advise the full extent of the minister's role, the role of the office and the role of the department in assessing, approving and administering the sports and infrastructure grant payments?

The Hon. A. KOUTSANTONIS: What is the reference again?

Mr TARZIA: Any one of these but figure 3.2, 'Grants to sporting clubs and local infrastructure projects as a result of the election commitment'. I am trying to understand the full extent of the minister's role, the role of the minister's office and the role of the department in assessing, approving and administering those sport and infrastructure grant payments.

The Hon. A. KOUTSANTONIS: I am advised that the total amount of grants expenditure incurred by the department in the 2021-22 financial year for the Community Infrastructure Grant Program was $27.937 million. These payments were included in the 2021-22 grants and subsequent expenditure in the department's financial statements.

The department's role was to administer the Community Infrastructure Grant Program. In undertaking the administration of the program, the department obtained relevant ministerial approvals and delegation to undertake negotiation and payment of grants, liaised with the Department of the Premier and Cabinet to obtain required grant scopes, took instruction from the Premier's Delivery Unit when further guidance was required, liaised with grant recipients, developed grant agreements in line with the requirements—for example, Treasurer's Instructions and whatever relevant legal advice was available or offered—excluded grant agreements with recipients in line with approved delegations, and established ongoing reporting to relevant stakeholders. That was the level of the involvement, I think, from my office and my department.

Mr TARZIA: Referring to the Auditor-General's Report, Part A, section 3.3, the Auditor-General asserts that the payment of public money should only occur after all public sector processes are completed. Does the minister agree with this assertion from the Auditor-General?

The Hon. A. KOUTSANTONIS: There is a higher authority than the Auditor-General, and that is the public of South Australia. They have spoken with a clear voice about who the government of the day will be. What the Auditor-General and the opposition are conflating is an existing grants program that takes applications based on merit compared to election commitments. They are two separate processes.

If the member and the Auditor-General are asking us to then go out to the public, make an election commitment but that election commitment has a proviso—that is, a question mark at the end of it saying 'only if the public sector agrees'—that is not the democratic process. The democratic process is. 'If we are elected, we will expend taxpayers' money on this infrastructure program.' That is an election commitment. The public of South Australia have the final say on whether that is delivered or not—not the opposition, not the Auditor-General, the parliament.

If this was a program of infrastructure grants where grants were offered for application—where the website publishes applications for grants, people can come along, make an application on behalf of the Blue Eagles Soccer Club, make an application for new change rooms—and their local MP writes a letter of endorsement and that is put into the mix, and then there is ministerial interference, I think that is the type of behaviour the member is talking about.

But if the member for Hartley at the last election made a commitment to, say, a local community group in his electorate, that if a Marshall government were returned this amount of money would be expended on this piece of infrastructure at this local community group, they are the public sector processes that should be implemented. The public sector processes after that point are the appropriate execution of that grant through the appropriate legal mechanisms, and the appropriate legal mechanism for that was the cabinet of South Australia and the budget process which was endorsed by this parliament.

Mr TARZIA: Referring to the Auditor-General's Report, Part A, section 3.3, the Auditor-General makes the following statement that 'the payment of public money should only occur after all public sector processes are completed'. Referring again to the same line, does the minister consider these payments for local infrastructure grants and otherwise have completed all public sector processes?

The Hon. A. KOUTSANTONIS: Yes, I do, and the highest authority in the land has endorsed them—the people of South Australia. Again, this is not the same as a grant line where people make applications and they are assessed independently by the independent Public Service that makes recommendations then to the cabinet for approval, or the minister. This is an opposition going to an election promising infrastructure works—for example, the north-south corridor and, for example, Majors Road.

If we take the logical extension of the member's argument, that commitment we made to invest $60 million to be co-funded by the commonwealth government is not an iron-clad guarantee that we can make to the people of South Australia at an election. We have to wait for some independent process of the public sector afterwards. The public sector work for the Crown. They do the bidding of the cabinet. The cabinet works for the will of the people, so we followed all the public sector processes appropriately. We were endorsed by the public. We took our program to the election. The public endorsed it and we executed it in the first budget.

Mr TARZIA: Referring to the Auditor-General's Report, Part A, section 3.3.4, titled 'No government records of why projects were chosen', does the minister's office have any records or assessment criteria available as to why certain projects were chosen?

The Hon. A. KOUTSANTONIS: The next line is that 'this is because this process was undertaken by the South Australian Labor Party while in opposition'—again. The democratic process is a complex one. It is not pretty. We have just gone through it with local council elections where people make all sorts of commitments to get elected, as the member for Hartley did when he ran in the most recent election. He made commitments to local community groups.

The process for formulating that is one in consultation with the local community. I can tell you that, in formulating that for a local community organisation in my electorate—for example, the Thebarton Aquatic Centre, which is to receive a $6.1 million grant for its upgrade—I did not call the Auditor-General during that process in opposition to see if he thought it was an appropriate expenditure of money. But the Auditor-General was free to vote at the election. He was free to vote yes, vote Labor, vote Liberal or something else if he wanted to.

The Labor Party was successful at the most recent election. We published what we were going to build. We published how we were going to reconcile that within the budget. We were then elected. Ministers were appointed legally. Those ministers formed the cabinet. The cabinet then created a budget. We brought that budget to the parliament. The appropriation was passed. The budget bills were passed and the cabinet, through its agencies, executed those grants.

Is the opposition saying that there is now a new layer of that democratic process that involves an unelected official who has no mandate to talk about exactly what election commitments are made? Because the inference is that, after we make our election commitments, we run it through another process through the department where the department could then look at our election commitments and decide which ones they want us to do and which ones they think we should scrap.

The discussion here would be the exact opposite. It would be, 'Why aren't you delivering on your election commitments?' Indeed, the first question I think the member asked in this current parliament was, 'Will the government follow through with all its election commitments?' The answer to that is yes.

Mr TARZIA: It is a shame the minister and I only have half an hour today, so what I will do is ask one question about Keolis Downer and then move onto energy, the other skill set of the minister. Very simply, is the minister able to advise when the contract with Keolis Downer will be terminated?

The Hon. A. KOUTSANTONIS: We made a commitment at the last election that we would return the operation of our trains and trams back into public hands. We did so before the then government announced they were breaking their election commitment of no privatisations to outsource the operation of our trains and trams. We wrote to all the proponents who were participating in a tender for these services. In effect, those letters said, 'Buyer beware. There is a general election scheduled for 19 March 2022 and if the Labor opposition are successful, they will be returning these services, regardless of any contractual obligations, back into public hands.' We intend to do it within this term.

Mr TARZIA: If the minister needs to change his personnel, please feel free to do so. We will move onto energy. I will go slow. I refer to the Auditor-General's Report, Part A, section 8.1, page 44, paragraph 3, referring to the government's commitment to build a hydrogen electrolyser facility at an estimated cost of $593 million, particularly in reference to a clean energy future. Is the minister confident that South Australia will reach its greenhouse reduction targets?

The Hon. A. KOUTSANTONIS: I am advised that we are on track to meet them and of course we have put plans in place to try to go further if we possibly can. It is a vexing challenge for the planet, but South Australia leads not just the nation but the world.

We are seeing the impact of climate change now. We are seeing it on the river communities in South Australia. We saw it on metropolitan Adelaide on the weekend. We are seeing it across the planet with these extreme weather events that are becoming more ferocious and more frequent. So we must do all we can to meet these targets and we are doing everything we possibly can to meet them.

Mr TARZIA: Minister, I refer to the Auditor-General's Report, Part A: Executive Summary, at 2.1.1, page 1, entitled 'Inherent risks rise with urgent and challenging government agendas', dot point 3, 'constructing a hydrogen electrolyser facility, power station and storage facility'. Can the minister firstly advise that this figure sits firmly at $593 million?

The Hon. A. KOUTSANTONIS: It does.

Mr TARZIA: On the same line, has the minister received any advice from any agency that this figure is likely to change?

The Hon. A. KOUTSANTONIS: That depends entirely on the scope and size of the project, but we have made it very clear to agencies that the budget is $593 million. We have done an initial market sounding and we are going out to the market in December. That process will come back with a series of options for us to consider, but we have made it very clear that our expectation is that the $593 million figure for capital infrastructure be honoured.

Mr TARZIA: Referring to the same line, with regard to the hydrogen facility, can the minister advise whether there has been any decline in wholesale energy prices?

The Hon. A. KOUTSANTONIS: From when?

Mr TARZIA: Recently.

The Hon. A. KOUTSANTONIS: The problem we have in South Australia is not that wholesale energy prices are high, it is that retail energy prices are high and the disconnect between wholesale energy prices and retail energy prices, which is frustrating. The problem we have in South Australia is the illiquidity in the forward markets. If we were able to achieve the wholesale energy market and make that available to local customers, that would see a dramatic improvement. However, international forces are vexing the wholesale power prices across South Australia and, indeed, Australia.

What we are seeing after a decade of delay on climate action is that the international price shocks that have occurred around the globe because of the war in Ukraine have seen a dramatic reduction in the availability of uncontracted gas, which has pushed the spot market up dramatically, and also because Russian gas has been cut off to Europe. Europe and the world are now burning more coal than they ever have over the last couple of years, which has dramatically increased the price of coal.

Coal last year was roughly between $A40 and $A50 a metric tonne. Today, it is over $600. Gas in South Australia was about $8 on the short-term trading market, up to $12; it is now nearly over $40. We are seeing our gas prices internationalised here locally, which means that whatever trading is occurring in the forward wholesale market is increasing wholesale power prices.

This is a national crisis, which was brought to bear by the most recent commonwealth budget when Treasurer Chalmers, in bringing down his first budget, basically informed the national parliament that they expected power prices to increase by over 50 per cent. In South Australia, that is a dramatic number which would exceed $1,000 for the average household, so these are major problems. What we need to do is work out a way to decouple gas and coal prices from the international market.

Importantly, what we are seeing now is New South Wales, Victoria and Queensland setting the price of electricity in this country, and the commodities that are setting that price are coal and water. Snowy Hydro and coal generators on the east coast have been setting the price in Australia for a long period of time and the plan of the geniuses opposite is to better interconnect our market with the New South Wales market, which is seeing wholesale prices dramatically increase. So we are in for a rough time.

Mr TARZIA: Referring to the same line and given the minister's comments, can the minister advise when exactly consumers can actually experience lower costs as a result of this hydrogen plan?

The Hon. A. KOUTSANTONIS: During the most recent election campaign, the opposition criticised the then Leader of the Opposition, the current Premier, for saying at an event that politicians who turn up promising dramatic price drops in retail pricing can never meet those promises—like members opposite, when they promised a $302 decrease in power prices as referred to in the 2016 ESCOSA report. They never even got close to reaching that number—not once.

In fact, from memory, and I stand to be corrected, every year that they were in office power prices were higher than they were under the previous four years of the Weatherill Labor government. Again, this mug's game, where politicians get up and say, 'I can drop your power prices by X,' quite frankly is not what the public want. What the public want to see is sincere policy work, long-term thinking about how to bring power prices down.

I often reflect on Sir Thomas Playford looking down on the current opposition disapprovingly for the way they have trashed the electricity market here in South Australia and the way they treated South Australians with contempt when they broke their solemn promise never to sell ETSA ever but did, and now we are paying the ultimate price for having complete loss of control of our electricity assets and they now complain about prices being higher.

We do not control our energy assets; we do not own our energy assets. We are building another energy asset. The last time we had an energy plan, we bought over 250 megawatts' worth of generation to be backup supply for the South Australian state. They were to be converted to gas-fire generation and stored in the interests of South Australians for backup reserve and spinning reserve. Members get in and they sell them.

We are now back here again building another 200 megawatts of generation to be owned and operated in the interests of South Australians to firm renewable energy using hydrogen as its fuel source. Again, we are pushing the envelope of technology, pushing the envelope of the transition to renewables to try to lower power prices, but I fear that if Labor is ever removed from office they will revert to form and just sell those assets again. They cannot be trusted with power and they cannot be trusted to lower power prices.

Mr TARZIA: I refer to the Auditor-General's Report, Part C, page 93, controls opinion findings, where the Auditor-General outlines that the Department for Energy and Mining used its departmental special deposit account for transactions associated with the Office of Hydrogen Power South Australia (OHPSA) after it was established on 19 May 2022. Can the minister outline the overall value of the non-approved transactions associated with the OHPSA that were paid out of DEM's departmental special deposit account?

The Hon. A. KOUTSANTONIS: It was $113,000 and it was obviously done to quickly establish the Office of Hydrogen Power South Australia. We agree with the Auditor here. It would have been better to have done this differently but obviously the fierce urgency of now overtook us to try to deliver the government's agenda. Again, this is a very good recommendation by the Auditor, which will be implemented in full.

We are completely committed to delivering our Hydrogen Jobs Plan. Rather than delay the implementation of this crucial election commitment by up to two months while the office could be fully and independently established, including establishing a new special deposit account, DEM supported the transactions during this period. The government accepts that the Auditor-General is right to raise this but circumstances prevented us from doing it any other way.

Mr TARZIA: Referring to the same line, can the minister give the committee a breakdown of those non-approved transactions associated and provide an outline of what those transactions related to?

The Hon. A. KOUTSANTONIS: It was $113,000, mainly in wages and I think some supplies and services.

Mr TARZIA: Referring to the same line, were any other staff seconded to OHPSA from DEM but paid out of DEM's existing budget in the 2022 financial year and, if so, what were their job titles and job classifications?

The Hon. A. KOUTSANTONIS: I am advised that no DEM staff were seconded during this period.

Mr TARZIA: I refer to the same line for the same project. Did OHPSA refer the hydrogen power station to Infrastructure SA, or is it intending to do so?

The Hon. A. KOUTSANTONIS: Infrastructure South Australia have a statutory role of doing gate reviews. I understand that is the norm for all infrastructure programs. Again, this was an election commitment the government is going ahead with. We are not waiting for an independent assessment about whether we should do it. We are doing it, but it is being submitted to the usual gate reviews is my advice. If that is not accurate, I will get back to you and check.

Mr TARZIA: I refer to the Auditor-General's Report, Part C, page 93, in response to findings of the Auditor-General that the Department for Energy and Mining explained that it used a special deposit account for non-approved purposes because of the need to implement SA government priorities. Minister, have you put aside financial controls and established public sector frameworks to implement government priorities?

The Hon. A. KOUTSANTONIS: No.

Mr TARZIA: On the same line, minister, the Department for Energy and Mining then went on to say that 'a new special deposit account will be established for the OHPSA'. Minister, can you advise the committee if a new special deposit account has now been established? What date was it established?

The Hon. A. KOUTSANTONIS: It has been established. I do not have the date with me, but I can get that for the member.

Mr TARZIA: I refer to the same line. As part of the audit process, did the Department for Energy and Mining or OHPSA provide the Auditor-General with the independent modelling and costings by Frontier Economics of the $593 million hydrogen facility?

The Hon. A. KOUTSANTONIS: The independent modelling was done for the Labor opposition, not for the South Australian government. The South Australian government has done its own body of work, and that is a current piece of work that is ongoing. I understand that the Office of Hydrogen Power SA does continual modelling, but the works that were done before the election are the property of the Australian Labor Party and remain so.

Mr TARZIA: The last question (and it is a shame because we are having so much fun) and still referring to the same line, does the minister foresee any risk associated with the OHPSA relying on nearly two-year-old independent modelling of the $593 million budgeted amount in the current high inflation environment?

The Hon. A. KOUTSANTONIS: That is a good question. As a shadow infrastructure minister, he should know that escalation is wreaking havoc across all jurisdictions—New South Wales, Queensland, South Australia. Every jurisdiction is having this problem. Projects are costing more and more because we are in a high inflationary market. Yes, that is all a risk but, like the Treasurer says, everyone has to cut their cloth to meet the times.

The CHAIR: There will now be a changeover of ministers.

Mr WHETSTONE: We will start with police and refer to report 8, Part C, page 380. Minister, how many FTEs have SAPOL recruited throughout the 2022 year?

The Hon. J.K. SZAKACS: To clarify, member for Chaffey, the 2021-22 financial year?

The CHAIR: That is correct, the 2021-22 financial year.

The Hon. J.K. SZAKACS: I will take the net number on notice, member for Chaffey, and I will come back to you on that one.

Mr WHETSTONE: On the same note, minister, how many FTEs has SAPOL lost or what has the attrition been throughout the 2021-22 year?

The Hon. J.K. SZAKACS: The 2021-22 year, I am advised, was a high attrition of 37.0 FTEs.

Mr WHETSTONE: So, minister, you know how many you have lost but you do not know how many you have recruited. Is that what you are saying?

The Hon. J.K. SZAKACS: Other than referring to the fact that I have taken the net recruited number on notice, member for Chaffey, that is correct.

Mr WHETSTONE: Since we last spoke in estimates, what measures is SAPOL currently employing to combat the struggling FTE count?

The Hon. J.K. SZAKACS: What page number was that, member for Chaffey?

Mr WHETSTONE: Page 380.

The Hon. J.K. SZAKACS: Member for Chaffey, as far as the 2022-23 financial year, I will bring your attention to next year's estimates that will be more able to furnish you with that response. But suffice to say that there are two particular factors that have shifted the dial on recruitment with SAPOL, the first of which is that we are now as a community and particularly as South Australia Police operating in a phase on the basis of post-COVID lockdowns and post-COVID restrictions and, most particularly for SAPOL, post emergency management declaration, so there is thankfully—and I think everyone would share my thanks on this—return to business-as-usual operations for SAPOL.

What we have seen as a result of that is a particular decline in the number of applications to SAPOL during the periods of COVID policing. There are many factors I could assume influenced that, but I think it would be fair to say that people were not applying to SAPOL in the same numbers as pre COVID because they saw policing look very different from the policing that they had come to know or would expect to know.

Since the emergency management declaration has ceased, I am advised that the net number of applications to SAPOL has increased significantly and what that means is that the total pool of potential recruits has increased significantly as well. I will take advice from my adviser in a moment, member for Chaffey, on the average number of applicants who are successful, but it is a relatively low number comparatively speaking, so I can advise you that that has shifted, the dial has shifted.

Secondly, and I will take on notice a particular breakdown of the expenditure, through a portion of SAPOL's existing resourcing as well as carryovers from 2021-22 we have seen the amplification of the SAPOL recruitment campaign. It is not just that. People like you and the member for Hammond are reminding people, as am I, that now is a great time to apply for SAPOL; in fact, it is a hell of a job—secure work and well paid.

That amplification has been funded directly and that additional amplification, as I am advised, has been reaping the benefits with a high number of applications, a high number of available recruits, and that has therefore washed through with recruitment being amplified since the 2021-22 financial year.

Mr WHETSTONE: I understand the complexities of COVID, but has there been a concerted effort to address the struggling FTE count? Do you have a public campaign that you are currently undertaking?

The Hon. J.K. SZAKACS: Yes, there is. Broadly speaking, it's called the Calling All campaign. That is multifaceted, and I can walk you through some of the detail on that. At a very basic level, when it comes to paid advertising, digital activation and the like, there has been collateral designed around the Calling All campaign. Multiple individuals from SAPOL have participated in being the face of that campaign from a diverse range of backgrounds. They have talked about their experience, and they have also talked about the benefits of SAPOL and recruiting.

We have returned to public activities, to a large degree business is as usual, and I give the example of the Royal Show. The Royal Show forms just one but a significant part of that public facing, public activation of recruitment. When I was at the Royal Show and spent significant time with SAPOL at their stall, there was the Calling All portion of that. They are the things that SAPOL could not roll out.

I would acknowledge that, as a member of the former government yourself, there was a lack of levers to pull as a government when you could not have that public activation to show the public face of SAPOL, which in itself is one of the greatest recruiting tools we have.

Mr WHETSTONE: Moving on to report 8, Part C, page 381, why has the establishment management committee not met since you have come into government?

The Hon. J.K. SZAKACS: I am advised that at the transition from the emergency management declaration, as I previously mentioned, the EMC has been replaced by the business continuity executive management group. It is not that one committee in the operations therein have ceased; it is that there has been the transition to the aforementioned committee.

Mr WHETSTONE: Do you see the reformation of the EMC?

The Hon. J.K. SZAKACS: I am advised further, and subject to the Auditor-General's remarks on the re-establishment of that committee, that at the conclusion of the COVID-19 activity there will be the transition back and the re-establishment of the committee.

Mr WHETSTONE: Moving onto report 8, Part C, pages 382 and 383, what is the current state of the Shield Business Transformation Program? Are you expected to have that program completed by June 2023?

The Hon. J.K. SZAKACS: I am working back to front in your question: I am advised that the current approved schedule remains June 2023 for completion of that Shield project. Broadly speaking to your first part of the question, as you would no doubt know, the Shield program has been a longstanding piece of work undertaken by SAPOL, its genesis being 2009. That was the first approved submission for the project. It has been tranched out, three and four. Currently, one has been completed and the next one is being embarked on. I can give the member my advice to me with satisfaction that the June 2023 completion date remains on track and is approved by the Shield management board itself.

Mr WHETSTONE: Minister, can you give me a better understanding of what remediation actions the Shield program board has developed to address the reports areas that needed improving?

The Hon. J.K. SZAKACS: I am advised that the board is managing the implementation and remedial actions that have either been undertaken or are to be undertaken. I am advised that some of the recommendations for remedial action, as recommended by the Auditor-General, have already been completed. I am advised that there is a further suite of remedial actions which are being fleshed out and which will be implemented under the guidance and governance arrangements that the board currently has.

Mr WHETSTONE: What steps will SAPOL implement to address the identified weaknesses in the user management controls, particularly in the CHRIS21 and the SACAD programs?

The Hon. J.K. SZAKACS: I am advised that is a different project and may be a different reference in the Auditor-General's Report.

Mr WHETSTONE: Sorry, minister?

The Hon. J.K. SZAKACS: I am advised that your question relates to a different project and may relate to a different line item in the Auditor-General's Report.

Mr WHETSTONE: I refer to report 8, Part C, page 385. What steps will SAPOL implement to address identified weaknesses in user management controls, particularly in the CHRIS21 and SACAD programs?

The Hon. J.K. SZAKACS: I am advised that CHRIS21 is maintained by Shared Services, and that, with certain user access management controls, is managed directly by SAPOL itself. The Auditor-General reviews 'the SAPOL user access management controls for the CHRIS21 environment, including privileged user access, user onboarding, user offboarding, user access reviews and audit and logging of application users'.

The 2020-21 review identified insufficient review of application audit logs and privileged users. I am further advised that SAPOL has implemented the process for the independent review of the audit logs for this privileged user cohort. The review and audit are conducted each month, and a formal SAP has been developed to provide guidelines regarding the process. The quarterly audit of CHRIS21 users continues, and this includes the identification of users who are currently on long-term leave.

Mr PEDERICK: I refer to the annual report, Part C: Agency Audit Reports. At the bottom of page 396 it states that the emergency services sector had not developed an information, communication and technology strategic plan. My question is: how safe is information held within the emergency services sector, considering there is no ICT strategic plan, including compliance with the expectations of the South Australian Cyber Security Framework?

The Hon. J.K. SZAKACS: I will take the question in two parts, the latter being that I am satisfied that there are significant safeguards. In direct response to your question whether it is safe, yes, it is, but we do know and acknowledge the findings of the Auditor-General for the 2021-22 year.

I can advise in direct response to those findings of the Auditor-General that the emergency services sector has already commenced work on the development of a strategic ICT plan with support from an experienced IT consulting organisation. The ICT strategic plan will be developed alongside and aligned with the new SAFECOM Strategic Plan which is due in 2023. This ICT strategic plan is anticipated to form the basis of future submissions and initiatives that will further enhance cybersecurity and IT general controls. Both these matters I believe were remarked upon by the Auditor-General.

The identification and reporting of the emergency services sector ICT strategic risks have been included as an initiative in the ESS 2022 security uplift program—this has already been included. The program of work is addressing the top security improvements identified as a result of the 2022 security at a station reporting period.

The reporting of ICT strategic risks will be incorporated into the reporting provided to the newly formed ICT Governance Committee, and the ESS Risk and Performance Committee, ensuring an appropriate level of oversight and risk management. I am further advised that work has commenced on the development and testing of an ICT disaster recovery plan. This project commenced in August 2022 and is expected to be completed by March 2023.

The anticipated outcomes of this project will include the development and testing of an IT disaster recovery plan, the identification of gaps between the current achievable systems recovery times and the required MAO and developing actions plans for improving recovery times, and, finally, audit of backup management policies and practices and document opportunities for improvements. The findings were also made with respect to the ITGCs for Alert SA, but that will form a different body of work undertaken by the ESS.

Mr PEDERICK: With regard to that, on page 397, and noting your answer to the previous question, how are we going to get on noting that there will not be an ICT disaster recovery plan in place over summer, and what risk does this pose to the community and the ability to reduce damage or disruption from disaster events?

The Hon. J.K. SZAKACS: I can give you the confidence to advise that the systems for this matter are in place. The findings and recommendations of the Auditor-General are limited to governance and frameworks, so that is the body of work that has been undertaken, but the systems are well and truly in place. With respect to your question, they are well and truly in place at this juncture, leading into the bushfire season.

Mr PEDERICK: At the end of page 397, the Auditor-General talks about the need for further improvements of the emergency services sector asset management practices and the ESS responded saying that it has made progress on improving this but that it was hindered by some challenges. Can the minister provide an update on whether the ESS has made further progress on its asset management practices since the audit took place?

The Hon. J.K. SZAKACS: I am pleased to advise that, yes, the emergency services sector has taken action arising from the audit findings. I do note that those findings were in some part regarding the MFS, and I can advise that the MFS matter at hand is a contract that was entered into in 2018 with Babcock. This is not a new contract, nor are there new systems, but we recognise that there has been a review in the audit that has made these recommendations.

The MFS is working collaboratively with Babcock to ensure that the asset management service partnership agreements are materially provided and that agreed assets are appropriately maintained. The MFS is currently liaising with Babcock to define and develop suitable key performance indicators and provision of related supporting information required under this agreement.

Regular operational meetings with Babcock will be formalised. I am advised that today they have not been formalised but will be formalised through 2022-23 to record agreement outcomes, discussions and matters for action, including the presentation and adequacy of reports and these KPIs that have been developed.

Mr PEDERICK: Referring to page 398, I understand that six Metropolitan Fire Service sites were contacted by the Auditor-General to check whether they had maintenance scheduling matrices. It was found that none of the six sites had schedules established. Is the minister concerned that there is a risk that some equipment and appliances are not up to standard due to some sites not having maintenance scheduling in place?

The Hon. J.K. SZAKACS: I have been advised and I am pleased to report that the MFS is taking that remedial action, as advised in my previous answer, with respect to these audit findings. As I remarked, this is not a new contract; however, there are systems and governance matters that are being attended to.

Insofar as my own personal concern or otherwise regarding the fleet and the MFS, I think it is fair to say that this government has been well and truly up-front about our concerns with the way the fleet and the MFS, across the 2021-22 financial year and in fact the years before that under the former Marshall government, were significantly forgotten about. We have made a significant capital investment. We took that to the public and were very up-front about that leading into the election. We made an election commitment, and I am very pleased to advise the member for Hammond that we are delivering on that election commitment to roll out new trucks and new appliances to significantly lower the average fleet age within the MFS.

Mr PEDERICK: On page 400, it talks about SAFECOM's Alert SA mobile application. The Auditor-General's review identified some areas where controls can be improved and that SAFECOM agreed to take remedial action to address this issue. Can the minister outline what remedial action SAFECOM is taking to address the control risks?

The Hon. J.K. SZAKACS: I can advise that, with respect to the Alert SA recommendations and remedial action being undertaken by the sector in response to the Auditor-General's recommendations, the Alert SA disaster recovery plan is tested annually. Issues arising from the audit that occurred during the previous test period have been subsequently resolved. The audit and reporting of the ITGC implementation by the Alert SA supplier is planned to be addressed when the current support contract is renegotiated in 2023.

I am further advised that DPC have been approached to provide advice on the relevance of the web application standards to the Alert SA mobile application. DPC have advised SAFECOM instead to continue to focus on improving cybersecurity controls in line with the ESS 2022 security uplift program.

Mr PEDERICK: Also mentioned on page 400 are some areas of weakness where controls could be further improved with the South Australian computer dispatch system (SACAD). Has the minister made it a priority to improve controls with SACAD, given the control weaknesses may increase the opportunity for inappropriate access and unauthorised changes to the application?

The Hon. J.K. SZAKACS: Yes, I can advise that it is a priority of the MFS to respond and undertake remedial action in respect of the Auditor-General's audit. I can advise the member that in August the Auditor-General's Department provided the outcomes document, which described the findings of the audit and outlined the security risks inherent with the MFS SACAD environment.

It was requested that the MFS review the findings and provide feedback and detail remedial action to be put in place to mitigate the identified risks. The MFS has reviewed the report and, in most cases, has accepted the recommendations and identified internal controls that are being implemented to mitigate these identified risks. I am advised that the only exception to this is where the risk has been identified as generic and is an issue for all emergency services organisations, and the AGD and the supplier, Hexagon, will address and has been tasked to address these.

Mr WHETSTONE: Minister, I would like to move to Corrections, if I could, please. Also, minister, I do have one question in regard to the Motor Accident Commission. Is that something that we can—

The Hon. J.K. Szakacs interjecting:

Mr WHETSTONE: I refer to report 8, Part C, page 54. Why did the Department for Correctional Services cite the federal Auditor-General Act to refuse access to copies of the audit management letters and their corresponding audit reports?

The Hon. J.K. SZAKACS: I will take the substance of that on notice. Advice I have received is that that may be subject to an FOI application, but I will take that on notice and provide a more fulsome answer to you.

Mr WHETSTONE: Minister, have the Department for Correctional Services recently been audited by the federal Auditor-General?

The Hon. J.K. SZAKACS: No, they have not, member for Chaffey.

Mr WHETSTONE: Minister, I do have one question I would like to ask with reference to the Motor Accident Commission. Referring to report 8, Part C, page 325, MAC's total comprehensive result for the 2022 year was a $409,000 loss, but in 2021 there was a total comprehensive result of a $10 million profit. Can you give me an understanding why there was such a turnaround?

The Hon. J.K. SZAKACS: When I remarked before, I needed to hear the question from you before I could direct you in the right direction. If you refer to page 325, which I think you did, you will note at the bottom of that page those matters are administered by the Department of Treasury and Finance, so I cannot provide you with an answer to that. That is a matter for the Treasurer, if he is yet to be in.

Mr WHETSTONE: Minister, can you give me an understanding why there was such a comprehensive drop, from a profit to a loss in a one-year turnaround period?

The Hon. J.K. SZAKACS: Member for Chaffey, within my portfolio responsibilities and as quite clearly articulated by the Auditor-General, as Minister for Police responsible for road safety I am not able to provide that information. That is not within my portfolio responsibility.

The CHAIR: The examination has concluded for that section. We now move to the Minister for Small and Family Business. I declare the examination of the Report of the Auditor-General 2021-22 open. I remind members that the committee is in normal session. Any questions must be asked by members on their feet, and all responses are given by members on their feet. All questions must be directly referenced to the Auditor-General's 2021-22 Report and Agency Statements for the year ending 2021-22 as published on the Auditor-General's website.

I welcome the Minister for Small and Family Business and the member for Morialta. Are you ready to go?

The Hon. J.A.W. GARDNER: I indicate that I am looking at the attachments on the web that, as I understand it, form part of the proceedings, the financial statement for the Adelaide Festival Centre Trust, in which it identifies state government grants at page 8 of 20, for 2021 being at $15.496 million and 2022 being $25.881 million. I understand that may well include some additional supplementary funding that was provided as a result of the pandemic.

Can the minister identify what portion of that 2022 operating base grant is the standard operating base grant and are there any other grants that make up that figure of $25.8 million?

The Hon. A. MICHAELS: I can take some of that on notice, but I can indicate to the member that, out of that $25.8 million, $7.7 million was given to the AFCT to replace lost revenue during the closure of the AFCT and that $2.8 million was given as part of a business disruption insurance claim with SAFA. They are the main two, so that would come off that. The base operating grant I do not have the figure for on hand, but I will take that on notice.

The Hon. J.A.W. GARDNER: I understand that Mr Woolhouse wrote to the chair of the Festival Centre Trust board identifying a figure of $18.1 million in last year's budget. That sounds like it includes the $2.8 million you referred to before. I note that there is $14.5 million this financial year. Has the minister during the relevant time in the 2021-22 financial year had any meetings with representatives of either the board or staff at the Festival Centre Trust indicating a reduced requirement for government funding? Indeed, were there suggestions and requests from the organisation for increased funding especially in its 50^th anniversary year coming up?

The Hon. A. MICHAELS: The time period from the March election until 30 June I did have meetings, but not that I recall anything specific on the 50 years in that period of time. Subsequently, we have had discussions on what might be required for that.

The Hon. J.A.W. GARDNER: Was the government proposing to provide funding in addition to the operating grant to celebrate those 50 years, or is the Festival Centre Trust expected to fund 50^th celebrations out of that operating grant?

The Hon. A. MICHAELS: We are working through that at the moment.

The Hon. J.A.W. GARDNER: Can I ask the minister—and I note she has taken on notice the breakdown of the operating base grant—if she is able to advise if there are any other grant programs that the Adelaide Festival Centre Trust is able to access under the new government.

I note that on page 8 there is the Her Majesty's redevelopment funding, which I assume is now completed, the AFC redevelopment supplementation and also other SA government revenue, that is a more modest number. Are there other sources of income from the state government to the Festival Centre that are available under the new government?

The Hon. A. MICHAELS: In respect of 2021-22, I am not sure that that question is particularly relevant. Subsequently, we are obviously working with them on various funding including, for example, AFCT has conversations with SATC if there is a program that is being brought over, so there are those conversations happening. There is funding for the plaza as well and activating that, which I think was a $3 million figure last year, and that is an ongoing activation program. Yes, they have ongoing funding for the plaza activation.

The Hon. J.A.W. GARDNER: Has the minister had any discussions with the Adelaide Festival Centre Trust about the impact of that efficiency dividend, which was announced prior to 30 June, on staff or programs for the Festival Centre in an ongoing way?

The Hon. A. MICHAELS: I have not specifically, but in terms of the previous savings there have been conversations around that—previous savings of the Marshall Liberal government. There have been conversations around that but they are managing within their budget and most of the conversations are happening at department level.

The Hon. J.A.W. GARDNER: I think in question time the minister described those savings as 5 per cent. Does she stand by that claim?

The Hon. A. MICHAELS: Those 5 per cent figures do not relate to the 2021-22 financial year but they are figures from your first budget.

The Hon. J.A.W. GARDNER: Can I turn from page 8 of the financial report to page 8 of the Auditor-General's overall report, again related to the Festival Centre Trust, where the Auditor-General reflects on the decision of the previous South Australian government to transfer the Festival Centre complex assets from DPC to the AFCT and that that asset transfer is expected to occur in this current financial year. I note that this reverses a transaction the other way from 30 June 2008—in fact, the Auditor-General notes that again at the bottom on page 8 of his report. Can the minister confirm: is that transfer proceeding—indeed, it may have already happened—and what is the government's position on that approach?

The Hon. A. MICHAELS: Again, the department is working through that transfer at the moment. It has not actually been lodged with the lands titles office yet.

The Hon. J.A.W. GARDNER: But to be clear, there is no change in policy approach by the new government. Now I refer to the financial report of the State Theatre Company, again on the website captured by the motion as I understand it. The financial report at page 2 indicates revenues from the South Australian government as being $2.621 million in 2022, which is an increase from $2.603 million in 2021. Is the minister able to identify how much of that component, that $2.6 million, is the 2021-22 operating grant from the South Australian government? Does that figure include any other separate grants that are separate from the base operating grant?

The Hon. A. MICHAELS: For the 2022 financial year—and it is on page 7 of that report—the base funding is $2.469 million and tied grants funding is $152,000.

The Hon. J.A.W. GARDNER: I thank the minister for that assistance. In relation to the State Theatre, has the minister met with the State Theatre to discuss challenges around their rented premises, which is of course one of the significant expenses met out of this and other funding identified on page 7, as the minister has been kind enough to point out? Are there any further grants in addition to this base funding that the new government is providing to the State Theatre?

The Hon. A. MICHAELS: In respect of the 2021-22 financial year you are referring to?

The Hon. J.A.W. GARDNER: As we have established previously, the report reflects the 2021-22 figures. My question relates to not just the decisions taken in the first three months of the new government up to the end of that financial year but their response to the figures herein.

The Hon. A. MICHAELS: In respect of the 2021-22 financial year, I do not think I can make comment on that. To respond to your question, there have been discussions obviously about their facilities. I regularly meet with the State Theatre Company chair, the artistic director and the CEO. Those meetings are happening regularly with a number of these key organisations.

The Hon. J.A.W. GARDNER: Is it the government's policy to provide any other grants or assistance to the State Theatre Company other than that provided in the base operating grant, which we have established was $2.469 million last year?

The Hon. A. MICHAELS: At this stage, no.

The Hon. J.A.W. GARDNER: Minister, I move to the Adelaide Festival Corporation financial statement which identifies, on page 1, SA government grants of $9.075 million. Can I confirm that that is the base operating grant that we have been talking about? The question that will follow, as it has with the others, is: are there any other sources of grant or other revenue for the Festival Corporation that this government is proposing to provide or is it the government's policy that that operating grant is the funding that the Festival Corporation gets?

The Hon. A. MICHAELS: That is largely the base operating grant. There was some COVID money in there. I do not have the figure for that. I can provide it on notice. If you turn to page 6, the note at 2.1 indicates there are some additional commonwealth and overseas government grants as well that supported the festival. The figure of $187,000 is for the COVID support.

The Hon. J.A.W. GARDNER: Page 6 talks about the $9.075 million South Australian government grant, which I assume is the base operating grant, and then it has $50,000 from the commonwealth and $138,000 from overseas governments. Is the funding you provided in the very last answer, the COVID-related funding, on top of this $9.263 million?

The Hon. A. MICHAELS: It is within that $9.075 million figure.

The Hon. J.A.W. GARDNER: I thank the member for the answer and ask if the Festival had indicated that they were expecting to have a lower level of cost going forward when they reflected on the bounty of the $9.075 million that they got in the last financial year. In the discussions that the minister has had with the board, the artistic director or the CE of the festival, have any of them suggested that $9.075 million was indeed too much and they wanted less?

The Hon. A. MICHAELS: I have not had any conversations suggesting that was too much.

The Hon. J.A.W. GARDNER: I thank the member. I now go to the Art Gallery board financial statement. It tells us on page 7 that there is a recurrent operating grant of $11.609 million in 2022, other state government grants of $1.2 million, external grants of $687,000 and commonwealth grants of $670,000. Can I ask if that recurrent operating grant question can be unpacked a little bit. Was there an adjustment for COVID for that one as well? I will repeat the question perhaps.

We are at page 7. The recurrent operating grant is listed as $11.6 million. I think 2020-21 says $12.4 million, and my recollection is that $12.4 million includes COVID supplementary funding. I am asking whether the $11.6 million includes COVID supplementary funding and, if so, what is the base level recurrent operating grant for the 2021-22-year?

The Hon. A. MICHAELS: We need to take that one on notice to pull apart that figure for the COVID support.

The Hon. J.A.W. GARDNER: In relation to the external grants, or in relation to any other source of potential income for the Art Gallery, has the minister provided any suggestion to the Art Gallery board that there will be any other source of grant or other revenue for the Art Gallery over and above the operating grant that comes from the state government?

The Hon. A. MICHAELS: I have not had those conversations to suggest anything, but the organisation would be out looking for other grant opportunities, I imagine, if that is what you are asking.

The Hon. J.A.W. GARDNER: It is, but I am interested in whether the minister is involved in that, but maybe I will go to a specific question. Page 7 talks about the state government grants that are separate from the recurrent operating grant. It has $1.2 million listed in 2022 and $373,000 listed in 2021. Presumably these are grants from either the minister's department or other departments that are separate from the operating grant. I am curious to know whether it is the new government's policy to apply those grants going forward to the Art Gallery in the way that it was clearly done in 2021 and 2022.

The Hon. A. MICHAELS: In terms of what that money would be for, as I understand it a large part of that would be grants for running the facility. None of that will change, so to answer your question, no, there is no intention to change.

The Hon. J.A.W. GARDNER: Confirming then that the grant in question—which is listed as $1.2 million in 2021-22 and for other state government grants $1.238 million is listed on page 7—is expected to happen again?

The Hon. A. MICHAELS: I cannot confirm the quantum going forward, but it depends on what their requirements are.

The Hon. J.A.W. GARDNER: Is the minister able to identify from what source that $1.2 million comes or what sources?

The Hon. A. MICHAELS: It is DPC funding.

The Hon. J.A.W. GARDNER: I take us to the library board's financial statement. I refer to page 9, which delineates operating grants for both the State Library and the support of public library services. As I understand it, the public library services is a multiyear agreement, and that is set in place for the next three or four years, I think, after which it is a matter of government policy as to what that funding level is.

In relation to the provision of State Library services, the funding figure allocated in here is $14.866 million. Have there been any discussions with the director of the State Library, or indeed anyone in relation to the State Library, to suggest that $14.866 million is more than they need to provide the services that the South Australian community has come to expect from the State Library?

The Hon. A. MICHAELS: They worked towards their budget. That was their budget in that financial year. They have their budget for the current financial year. That is how these organisations operate, so they will work to the budget that they are provided.

The Hon. J.A.W. GARDNER: It is my understanding that in the current financial year the budget in question that the minister just referenced is about $1.2 million less than that $14.866 million. Is the minister able to identify what services the State Library will not be offering in the future as a result of that change?

The Hon. A. MICHAELS: The State Library board will be working through that to reach their budget. I do not have any detail on what that will involve from their perspective for the current financial year.

The Hon. J.A.W. GARDNER: Are there any other sources of revenue available to the State Library other than this operating grant from the state government?

The Hon. A. MICHAELS: If you have a look at page 9, there are other contributions they receive, including from council, other investments, and there would be philanthropy available to them and other sources of grants from potentially the federal government and sponsorship.

The Hon. J.A.W. GARDNER: Can I turn to the Museum board's financial statement. Page 2 refers to grant income, although there is a note sending us to item 2.1. The minister may happen to have the page reference for that if I do not. Page 8 talks about grant income, the Museum board receiving $12.09 million in grant income. Is it possible to unpack that? How much of that is the total annual operating grant, and are there any other funds that are included in that $12.039 million figure for grant income on page 8?

To save the minister some time we will go to page 11 which does start to provide some of that information. It says the operating grant is $11.002 million. I think that is the figure I was looking for a minute ago. Then it talks about a state government grant of $350,000 and a general grant of $230,000 as well as a commonwealth grant. Can the minister identify where that other state government grant of $350,000 comes from, and is that a grant that the Museum can count on receiving in the future?

The Hon. A. MICHAELS: We will take that one on notice to see the specifics of it. It might be very similar to the Art Gallery figure we were talking about before, but we will take that on notice.

The Hon. J.A.W. GARDNER: Can I ask a similar question in relation to the general grant on the next line of $230,000?

The Hon. A. MICHAELS: We will take that on notice.

The Hon. J.A.W. GARDNER: I have one other question in relation to this run, on Country Arts SA's financial report, and taking us to page 5 that has a rundown of cash inflows, including $4.6 million in state government grants, $1.15 million in receipts from grants and subsidies. How much of the Country Arts SA $4.6 million grant is the operating grant, and are there any other aspects to it, or is that the base operating grant that the government provides?

The Hon. A. MICHAELS: What was the page number?

The Hon. J.A.W. GARDNER: It's on page 5 of the Country Arts Trust financial statement.

The Hon. A. MICHAELS: Is that the statement of cash flows that you are referring to? Yes, and the figure is?

The Hon. J.A.W. GARDNER: The $4.655 million is listed as SA government grants, and I am wondering if that is entirely the operating grant, the base operating grant, or if there are other grants comprised in that as well.

The Hon. A. MICHAELS: We will have to come back to you after we get a breakdown of that.

The Hon. J.A.W. GARDNER: Three lines below there is a figure of $1.15 million received from grants and subsidies. I am happy to take this on notice, but can the minister provide a breakdown of where that comes from? Are those grants and subsidies going to be available in the future?

The Hon. A. MICHAELS: We will take that on notice and come back to you.

Mr TEAGUE: Referring to the Auditor-General's Report, Part C, page 19, there is an indication from the Auditor-General that one of the revenue streams in the LOGIC revenue was identified as being the subject of incorrect fee waiver. As I read the report, the Auditor-General has identified that, and it relates to fees under the Land Agents Act 1994 for auctioneer variations.

The indication is that CBS responded and has updated policy so that the correct amounts are waived, but the question is: with what consequence? I can perhaps make that more particular, if necessary, but has the cost to either customers or government been calculated? Have there been overpaid fees returned? What has been the wash-up of all that?

The Hon. A. MICHAELS: No, it is actually the reverse. What had historically happened was that the auctioneer fee and the application variation fee were the same, and one of those fees was waived. In 2021-22, the application variation was charged at a lower rate, so CBS received less income than it would have, rather than affecting the customer on the other side. That has been corrected now, only because of the variation in the regulation that set the fees that changed them.

Mr TEAGUE: So there is no intent to take steps to recover that with a view to increasing CBS's income for 2022-23?

The Hon. A. MICHAELS: In fact, it reduced CBS's income that they would have otherwise been entitled to.

Mr TEAGUE: At page 19, we see the revenue from gaming and taxation, totalling $356 million. I see that is replicated at pages 24 and 28 in the table respectively, as I understand it. Taxation revenue on page 24 at the top of the table is up $37 million, and at page 28 there is the same reflection in narrative. If I am so far on the right track, is it possible to advise the breakdown between what are described there as gaming revenue on the one hand and taxation revenue on the other?

The Hon. A. MICHAELS: To clarify your question, are you asking for a breakdown between the net gambling revenue and the gaming tax liability? For 2021-22, net gambling revenue was $831.12 million and the gaming tax liability was $356.23 million.

Mr TEAGUE: In relation to the Residential Tenancies Fund, there is a note at the bottom of page 19. The description 'unclaimed bonds' is something of a misnomer insofar as it relates to bonds that have been attempted to be returned but there has been an issue with the bank account or something of that nature that has prevented it from being returned. Over the page, there is an indication that 4,600 such unclaimed bonds, valued at $6.3 million, have been returned. Is that reducing, therefore, the $14.2 million, or how is that best interpreted?

The Hon. A. MICHAELS: Overall, the fund is increasing. There have been significant improvements in returning unclaimed bonds, as I am sure you are aware, through the bonds management system. Although there is an overall increase, it is not increasing as substantially because of the improvement in returning bonds, if that makes sense.

The CHAIR: The time has expired for this portion of the examination. Now we move to development and planning. I declare the examination of the report of the Auditor-General 2021-22 open. I remind members that the committee is in normal session.

Any questions have to be asked by members on their feet and all questions must be responded to on their feet and directly referenced to the Auditor-General's 2021-22 Report and Agency Statements for the year ended 2021-22 as published on the Auditor-General's website. Minister and member for Colton, are we ready to go? The questions are all yours.

Mr COWDREY: Minister, there was clearly little interest from the Auditor-General in regard to the trade department this year, with there only being, from my reference point, one single reference to the department on page 577, referencing that the department would not be audited this year. However, we do obviously have the annexure to his report, which is the Auditor's view of the financial statements. Are you able to confirm whether or not the Auditor did conduct any sort of work in regard to the Department for Trade and Investment outside that to do with the financial statements?

The Hon. N.D. CHAMPION: The answer to the member's question is that we received a letter from the Auditor-General saying he has audited the financial report of the Department for Trade and Investment for the financial year ended 30 June 2022. Obviously, it is the Auditor-General who decides to do more in-depth reports per agency. I think in this case he decided to group smaller agencies like the Department for Trade and Investment together for supplementary reports, as I understand it.

Mr COWDREY: So, to confirm, there was no further correspondence between the Auditor-General and department over the preceding 12 months?

The Hon. N.D. CHAMPION: No, just the normal audit reports.

Mr COWDREY: Has the Auditor-General provided you or the department with any indication of when he may provide a more in-depth audit of the department's processes into the future?

The Hon. N.D. CHAMPION: I am advised that this year is just that single letter that the department has been given. Next year, obviously the agency will be somewhat larger because planning will be included, having transferred over as part of the machinery of government changes from Attorney-General's into the Department for Trade and Investment. So we expect to have a more fulsome report next year but, again, that is up to the Auditor-General.

Mr COWDREY: Has the Auditor-General or his office provided any reasoning to you or the department as to why there was no further work done this financial year?

The Hon. N.D. CHAMPION: No. That is a matter for the Auditor-General. He chooses to what degree he audits the relevant departments.

Mr COWDREY: With regard to the financial statements that the Auditor-General has viewed this financial year, are you able to confirm whether or not Invest SA was part of the audit process in terms of those financial statements this financial year?

The Hon. N.D. CHAMPION: The answer to the honourable member's question is that the investment function, which was always present in the department, was of course in this report but the government's commitment to establish Invest SA will be in next year's report because it did not begin until the subsequent reporting period.

Mr COWDREY: This may be a similar answer but in regard to the financial statements, was Brand SA captured as part of this reporting period?

The Hon. N.D. CHAMPION: Brand SA, of course, was subject to cuts under the previous government; it was effectively abolished. We are re-establishing it as of this financial year, so it will be in next year's Auditor-General's Report.

Mr COWDREY: If I take the minister to the provided annexure, at page 33, administered income and administered expenses, it sets out the SA government grants, subsidies and transfers that are covered by the financial statements of the department. Are you able to provide an overview of how many grant programs are administered by the department?

The Hon. N.D. CHAMPION: There are a number of them, such as the Landing Pad, the wine program and a range of others. What I will do is take that question on notice and provide you with a full list.

Mr COWDREY: In that same vein, are you able to confirm the total quantum of money provided through grant programs by the department?

The Hon. N.D. CHAMPION: I will take that on notice and undertake to do that as well.

Mr COWDREY: With regard to those programs—again, I am not asking for a wholesome list from you because I know you have taken that on notice—are you able to confirm what programs have been announced and commenced or are yet to be commenced since the change of government in March 2022?

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

Mr COWDREY: Through the same line of questioning, again not asking for specifics in terms of the total programs, can the minister provide the committee with information regarding the grant programs that have ceased or wound up since the change of government in March 2022?

The Hon. N.D. CHAMPION: As part of the 2022-23 budget savings targets, we decided to wind up early the following time-limited programs: the Export Fundamentals Program, the virtual business matchings program and the National Trade Program, and we have also wound up the South Australia Export Accelerator Program. Does that assist the honourable member?

Mr COWDREY: Is that the totality of the programs that have ceased?

The Hon. N.D. CHAMPION: Yes.

Mr COWDREY: The minister is able to advise on which programs have ceased but is unable to give the committee any information regarding programs that have commenced?

The Hon. N.D. CHAMPION: I have taken that on notice, so I will provide the information to the committee.

Mr COWDREY: Is the minister able to provide to the committee any further information, outside the Landing Pad, as further information in regard to grant programs provided by the department?

The Hon. N.D. CHAMPION: The department's ongoing funding of the South Australian Landing Pad program and the Wine Export Recovery and Expansion Program, and if there are any other programs that have begun in that time, I will take that on notice and provide it to the honourable member.

Mr COWDREY: My questions are again in relation to the annexure provided by the Auditor-General in relation to the financial statements of the Department for Trade and Investment, in particular section 3.3, employee benefits and expenses and salaries and wages. Was the recruitment process of Christopher Wood as Executive Director of Invest SA by direct approach, or was there a recruitment campaign undertaken in each appointment?

The Hon. N.D. CHAMPION: There was an appropriate recruitment campaign. It was advertised nationally and all the normal arrangements and protocols were undertaken.

Mr COWDREY: What KPIs sit with the executive director, Christopher Wood, of Invest SA?

The Hon. N.D. CHAMPION: I do not want to be difficult with the honourable member—and perhaps he could ask me in the house or on notice—but the appointment of Mr Wood is subsequent to this particular Auditor-General's Report. I do not think the question is in order.

Mr COWDREY: I am happy for you to take it on notice if you wish now?

The Hon. N.D. CHAMPION: I cannot take on notice a question that is not in order. If the honourable member asks me in another forum, I am only too happy to answer.

Mr TELFER: I direct your attention to page 18 of the aforementioned document, the overseas representative officers. You see the differentiation between 2021 and 2022 of the London office operating expenses: $1.512 million for 2021 and $1.740 million for 2022. Can you give me an insight into the reasons behind that differentiation of $228,000?

The Hon. N.D. CHAMPION: I think I might take that question on notice.

Mr TELFER: As a follow-up to that, there is a difference in the operating revenues as well which would be of interest on that same page. Obviously there is a decrease in the Jinan as opposed to the significant increase in the London, so it would be of interest to know the reasoning behind those two.

The Hon. N.D. CHAMPION: I am happy to take them both on notice.

Mr COWDREY: In regard to section 3.3, again on TVSPs, and given that the minister brought the 2022-23 savings task into the remit of the committee through his answer earlier, how is the department going in terms of meeting its savings task and how many TVSPs have been provided to Department for Trade and Investment employees?

The CHAIR: Up to 30 June 2022?

Mr COWDREY: Up to 30 June.

The Hon. N.D. CHAMPION: There are none in Trade and Investment, and one in Planning.

Mr COWDREY: And the savings task, minister?

The Hon. N.D. CHAMPION: Yes, we are confident that we will deliver it, and obviously with the programs I mentioned before and a restructure of the department we are confident that we will meet the government's savings target.

Mr TELFER: Moving to Planning, my reference is report 8, Part A: Executive Summary, pages 6 to 9—Payment of sporting club and local infrastructure grants because of election commitments. On page 6, the Auditor-General explains:

…I have qualified my opinion for aspects of the processes used to select the recipients and determine the value of specific sporting and local infrastructure grants made in June 2022 as a result of election commitments. These processes were conducted outside of the usual public sector framework for government grants. Consequently, the controls that would be expected to operate over determining these grants were not applied.

The Auditor-General goes on to state:

I was advised by DPC that there are no government records that capture the assessment processes and decisions about which individual sporting clubs and local infrastructure projects would receive grants or the value of the grants.

Furthermore, on page 9, the Auditor-General notes:

This was consistent with my understanding from information the Premier provided to the Parliament, that the funding commitments were made by the South Australian Labor Party prior to the 19 March 2022 State election.

The Auditor-General continues:

As explained, I have qualified my annual controls opinion because the processes to select and decide the value of funding to recipients of grant payments of $133 million were not conducted within the public sector framework and processes.

In my opinion, the payment of public money should only occur after all public sector processes are completed.

I appreciate your taking the time to re-read these aspects with me and I can begin to assume what your answers might be. I think that it is very important to have a high level of accountability when it comes to public funds, especially throughout a process that should be followed transparently, fairly and complying with public sector protocols. Can the minister offer an insight as to what analysis was undertaken by the SA Labor Party while in opposition on the merits of each project that has been awarded government funding without due process?

The CHAIR: Can I just clarify the initial reference for that?

Mr TELFER: Report 8 of 2022, Part A: Executive Summary at pages 6 to 9.

The CHAIR: I cannot see the references to the minister's portfolio.

Mr TELFER: Sir, I am talking about processes that are followed and we can follow on because, to give more insight to you, the minister has previously spoken about these projects being funded out of the Planning and Development Fund, thus it is well and truly under his portfolio.

The CHAIR: So you are asking if they were funded out of the Planning and Development fund?

Mr TELFER: Yes.

The CHAIR: Up 30 June 2022.

Mr TELFER: Yes. I am asking about any insight as to what analysis was taken on the merits of each project.

The CHAIR: I think this question has been asked at least a dozen times.

The Hon. N.D. CHAMPION: Yes, Chair, it must be the first time in human history a government has been taken to task for meeting its election commitments. It is quite extraordinary. I have been in opposition myself once or twice and, let me tell you, it is not the approach that we took. We looked for governments not meeting their promises.

So the honourable member is aware, Planning and Land Use Services did not provide any grant, I am advised. Planning and Land Use Services did not provide any grant payments under the Planning and Development Fund in 2021-22 which are associated with the 2022 election commitments. So the honourable member I think will have to wait until another time.

Mr TELFER: I will save that question for another 12 months, when we are having the same conversation if you are still in this position. Does that also include—

The CHAIR: I do not think that is necessary, member.

Mr TELFER: He may be Premier, sir. A man of such great stature may well be Premier.

The Hon. J.A.W. Gardner: He may get promoted to Deputy Speaker.

The CHAIR: Promoted?

Mr TELFER: In your answer, does that also include funding from within the Open Space program?

The Hon. N.D. CHAMPION: Yes.

Mr TELFER: Perhaps I will save that one until the next one as well. I will then reference report 10 of the 2022 state finances and related matters, page 47, figure 5.12. The Auditor-General noted that non-residential building construction costs in 2021-22 had increased by 4.7 per cent and that road and bridge construction costs had increased by 10.9 per cent. On page 46, the Auditor-General noted in relation to the infrastructure projects:

Significant increases in construction costs above the allowances provided for in the agency project estimates pose the risk of projects exceeding forecast cost estimates.

In August 2021, PlanSA announced the finalisation of plans for the Coast Park between Semaphore Park to West Lakes Shore. The previous Minister for Planning declared a linear park for a section of Coast Park between Grange and Tennyson stage 1.

On 4 November 2022, it was announced that the Minister for Planning had determined to establish a linear park from Semaphore Park to West Lakes Shore, with the design yet to be finalised and project construction due to be completed in 2023. This stage 2 Linear Park focuses on a section between Third Avenue, Semaphore Park, and the northern edge of the Wara Wayingga to Tennyson Dunes Conservation Reserve at West Lakes Shore. Does the minister expect the design plans for this section of Coast Park will change from those published in August 2021?

The Hon. N.D. CHAMPION: Again, I do not think the question is in order. It relates to what might happen next year rather than in this year.

The CHAIR: I did not get the original reference. What was the reference? You said it so quickly I missed the original reference, as did my assistants here.

Mr TELFER: Report 10 of the 2022 state finances and related matters, page 47, figure 5.12.

The CHAIR: To the extent that the minister can respond to anything which has happened up to 30 June, I notice that you referenced two announcements which were post 1 July. In that case, the minister is only required to actually respond to any information on or before 30 June, which I think he has indicated already that he cannot help. Next question.

Mr TELFER: Given the Auditor-General's comments in relation to the escalating construction costs, can the minister advise what is the current estimated cost of the construction of Coast Park stages 1 and 2?

The Hon. N.D. CHAMPION: It might be a question for another forum, Chair, but I do not think it relates to this section of the Auditor-General's Report. I do not think it is in order.

The CHAIR: I agree. Next question.

An honourable member interjecting:

The CHAIR: No, I read it as a point of order and I upheld his point of order. Perhaps members on my left should perhaps investigate the questions more carefully.

Mr TELFER: I will reference then, sir, and I will say it slowly for you: report 10 of 2022, state finances and related matters, page 3, paragraph 1.2.2. The Auditor-General notes:

The successful delivery of savings and maintenance of net operating surpluses may become more challenging if the SA Government's savings strategy continues to focus on non-frontline agencies. It is important that monitoring of these savings considers any potential service delivery impacts.

Can the minister advise specifically what savings targets or operating efficiencies have been set for Planning and Land Use Services, a non-frontline agency?

The CHAIR: Again, minister, you are only required to respond up to and including 30 June.

An honourable member interjecting:

The CHAIR: That's right, 30 June. I am happy to respond to 30 June. The Auditor-General's Report ends on 30 June.

The Hon. J.A.W. GARDNER: Point of order, sir: on the question that the member for Flinders just asked, yes, you are correct; obviously, the statements are only referenced up to 30 June. But the question can include, as I understand it, reflections on whether the government has a policy approach that is in response to the 2021-22 financial year that might be relevant for the future; otherwise, questions about whether the government or an agency had responded to a particular recommendation of the Auditor-General would also be out of order under the strict interpretation you have suggested.

The CHAIR: This is an examination of the Auditor-General's Report. I think what you are trying to cover are things that can be covered in other forums, either in estimates committees or by questions in the chamber. That is where you can go to your heart's delight about these matters. Can you please repeat the question.

Mr TELFER: My question was specifically around savings targets or operating efficiences because the Auditor-General does note—on page 3, paragraph 1.2.2 of report 10, as I said—the challenges around government savings strategies for non-frontline agencies. I am asking the minister for his perspective and his advice specifically about what savings targets or operating efficiencies have been set for Planning and Land Use Services, which is indeed a non-frontline agency, as highlighted by the Auditor-General.

The CHAIR: That would have been included in the budget papers, and it should have been part of estimates. Savings are in the budget papers.

Mr TELFER: Sir, absolutely, I concur; the numbers are. I am asking about the impacts on the services of Planning and Land Use Services, which is a non-frontline agency, in response to the commentary that the Auditor-General has provided within his report.

The CHAIR: You are looking forward: an Auditor-General looks back. It is a simple formula. I used to work there. You can use all your time arguing with me, or you can use the six remaining minutes to ask questions relevant to the Auditor-General's Report. It is up to you. It is your choice.

Mr TELFER: I am happy, then, to get the perspective from the minister on the potential impacts up to 30 June 2022 on service delivery in Planning and Land Use Services.

The CHAIR: Minister, that question is in order.

The Hon. N.D. CHAMPION: The nature of this particular report is that it runs across two governments, so any efficiency dividends would of course have been set in previous budgets by previous governments.

The Hon. J.A.W. Gardner: So if they were bad, yours were worse.

The CHAIR: Member for Morialta!

The Hon. N.D. CHAMPION: If there were to be any impact on the frontline services as a result of meeting them, they would not necessarily all be this government's doing. I do not know what more I can do to illuminate the honourable member's—

The Hon. J.A.W. Gardner: You haven't identified any impacts.

The Hon. N.D. CHAMPION: Well, that's right.

The Hon. J.A.W. Gardner: So there are no impacts from budget cuts?

The Hon. N.D. CHAMPION: The departments are meeting their efficiency dividends, as I understand it. I am advised that there are no impacts to the public.

Mr TELFER: So, to illuminate me, there are no potential impacts to service delivery or to upcoming programs of work that have been identified?

The Hon. N.D. CHAMPION: In planning, as I am advised, we met those efficiency dividends through a combination of internal savings and staffing savings. That was all done to minimise the impact on the public under both governments.

Mr TELFER: Planning and Land Use Services obviously provide governance and administrative services to the State Planning Commission, which has no staff or resources of its own. We have had an insight from the Auditor-General about potential impacts to the non-frontline agencies.

The annual report of the State Planning Commission also outlined many projects of strategic importance, including five investigation projects that will provide a framework and an evidence base to inform the development of regional plans in 2022, especially the regional plan for Greater Adelaide. I will not use up the time by mentioning those five points, but I am sure the minister is well aware of them. Can the minister advise whether those projects have been completed?

The Hon. N.D. CHAMPION: As I understand it, those five plans are all ongoing. Some are in a state of completion and some are not, but I might take the question on notice and provide it to you in due course. I have certainly seen no indication myself that the State Planning Commission is not undertaking the role in the most professional and competent manner.

Mr TELFER: Can the minister provide some details about what the governance approach for growth planning endorsed by the State Planning Commission in May 2021 is?

The CHAIR: While you are looking it up, can you repeat the reference for me, please?

Mr TELFER: I will have to find it.

The Hon. N.D. CHAMPION: Given that we do not have much time, I might take that on notice and get back to the honourable member with a fulsome answer.

The CHAIR: This might be your last question, so make it a good one.

Mr TELFER: How do I choose? It is like choosing between your children. In light of the savings targets and operating efficiencies that have been put in place by this government in the May budget, is the minister confident that Planning and Land Use Services has the resources and capacity to provide the necessary support to the commission for it to progress all the strategic projects currently underway?

The Hon. N.D. CHAMPION: The question is not in order, but of course the government has a budget, and we are undertaking to make savings, and we are confident we will meet them.

The CHAIR: That concludes the examination of the Auditor-General's Report. The committee has further considered the Auditor-General's Report 2021-22 and has completed its examination of ministers on matters contained therein.