REGIONAL SUBSIDIARIES

The Hon. J.S.L. DAWKINS (16:12): I seek leave to make a brief explanation before asking the Minister for State/Local Government Relations a question about regional subsidiaries under section 43 of the Local Government Act 1999.

Leave granted.

The Hon. J.S.L. DAWKINS: I understand that the minister has been developing regulations in relation to the amended Local Government Act 1999, which comes into effect on 1 July 2010 and which will impact on regional subsidiaries. I raised concerns about the audit requirements for regional subsidiaries in the committee stage of the bill on 1 December last year. I have since become aware that, as an example of these regional subsidiaries, the Murray and Mallee Local Government Association has an annual operating budget of approximately $110,000. It employs no staff; executive services are provided by a performance-based contract. It has no fixed assets, the only assets being cash on hand. It has no long-term liabilities and it presents financial accounts to the Murray and Mallee Local Government Association member councils on a bimonthly basis and has its accounts audited annually by external auditors with local government experience. Finally, it does not raise funds from ratepayers or provide direct services to ratepayers.

I also understand that, in accordance with the provisions of the Local Government Act 1999, the MMLGA must undergo a charter review this calendar year involving a gazettal cost of approximately $6,000. I understand that was previously done for free. This represents an increase of 6 per cent in the annual budget. I am also of the understanding that the Office of State/Local Government Relations stipulated that an audit committee provision be included in a recent regional association charter review. My questions are:

1. Has the minister finalised regulations for the act which comes into effect on 1 July? If not, when will they be finalised?

2. Will the minister assure the council that the regulations will exempt regional subsidiaries under the act such as the MMLGA and five similar organisations from the requirement to establish an audit committee?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for the City of Adelaide) (16:14): The honourable member is correct in saying that this government has put in place a range of new legislation in relation to reforms in the local government sector and those reforms are about improving transparency and accountability in local government. We found that standards for audits and a range of other administrative matters had increased quite significantly throughout other levels of government and other organisations. However, the local government sector tended to be lagging behind in changing its standards to reflect what I believe the community has now come to expect from those organisations, particularly those organisations that derive fees from them in relation to rates in this case.

In terms of the regulations, I am advised that work has commenced. However, they have not been finalised as yet. They will be completed as soon as we can possibly get them done. In relation to some of the matters around the subsidiaries and audit requirements for some of these groups, I understand that my office has received some correspondence.

The Hon. J.S.L. Dawkins interjecting:

The Hon. G.E. GAGO: Yes; I am advised that the regulations have not been finalised, which is exactly what I have said already. Getting back to the question of subsidiaries, I have been advised that my office has received correspondence in respect of those matters and I have sought further advice in relation to that. I am sure the honourable member is not suggesting that we should not give the level of consideration to these regulations that they deserve. Some deal with quite complex matters and have significant implications for a wide range of different groups, and all those matters must be considered before the regulations are finalised, so we are being a very responsible government.