PRINTER CARTRIDGE SCAM

The Hon. R.I. LUCAS (15:11): I seek leave to make a brief explanation before asking the minister representing the Minister of Finance a question on the subject of cartridgegate.

Leave granted.

The Hon. R.I. LUCAS: Over the last couple of months there has been an increasing number of stories and information provided to members of the media and also the opposition about what has become known as cartridgegate, and the government, as we know, has established a procurement working group, which is supposedly looking into the issue. Further information provided to the opposition indicates that, rather than eight companies being investigated, the investigation, in so far as it relates to at least one government department, has how been extended by another seven companies to a total of 15 vendors whose vendor arrangements with that particular department are now being investigated. I am advised that four of those additional seven companies are Data Solutions, MyCom Australia Pty Ltd, The Better Image Pty Ltd, and The Better Image International Pty Ltd.

I have also been advised that, as a result of the publicity in relation to procurement of cartridges, further information and concerns are being raised by public servants, both past and present, in relation to government procurement of other items, and I raise this afternoon procurement of stationery in particular. One former public servant, who worked for the old DAIS department (the department of administrative and information services) and then worked for Treasury, has raised concerns about actions that he witnessed in the old Supply SA department, in particular at the Camden Park depot, and also at government auctions at Marleston.

His concerns in particular relate to the time he was at the Camden Park distribution centre for Supply SA in the period 2007-08. The concern he raised was that a key function of that warehouse was the large quantity purchase of stationery orders and the distribution of stationery for schools for the new school year. He indicates that companies offered incentives for large purchases, which included wine, Xboxes (or video game consoles), Westfield shopping vouchers, fuel vouchers, etc. He alleges that officers at the warehouse were recipients of those goods and that he had personally witnessed them leaving the warehouse with goods.

In particular, he gives the name of one person, which I will not put on the public record, who he alleges filled his boot full of goods as he left that particular depot. My questions are:

1. Is it correct that 15 companies are now being investigated by the Government Investigations Unit in relation to at least one government department? If yes, have all other government departments and agencies now been advised of the names of the seven additional companies so that they can do searches of their procurement purchases for the period that is currently being investigated?

2. Will the minister investigate the concerns that have been relayed to my office insofar as they relate to procurement and purchasing at the Supply SA depot at Camden Park in the period 2007-08 and Government Auctions at Marleston, and is he prepared, having investigated that, to bring back a report to the parliament?

The Hon. R.P. WORTLEY (Minister for Industrial Relations, Minister for State/Local Government Relations) (15:16): I thank the member for his important questions. On 21 September 2011, allegations of inappropriate printer cartridge purchases were raised, and they were referred to the Auditor-General and South Australia Police. The Chief Executive of the Department of the Premier and Cabinet wrote to all agencies on 22 September 2011 seeking that they undertake an urgent review of the procurement practices, particularly in relation to the procurement of consumables.

In order to facilitate a methodical across-government approach to deal with this issue, a procurement working group was established on 1 November 2011. This group is comprised of senior officials of the Department of the Premier and Cabinet, the Department of Treasury and Finance, the Crown Solicitor's Office and the State Procurement Board. The Chief Executive of the Department of the Premier and Cabinet was appointed the chair of the procurement working group as a way of ensuring the most effective across-agency coordination.

The aim of the procurement working group is to coordinate and oversee the investigation by senior sector agencies of their records and procurement practices to identify anomalies or irregularities in the procurement of office consumables involving the provision of gifts or incentives. The group will also assist to identify and provide advice and direction as to the resolution of any impediments to the task of the gathering of information as to whether systemic or individual breaches of proper procurement processes have occurred.

Also, the group will identify and oversee the immediate implementation of measures that are directed at ensuring that procurement practices are being undertaken lawfully and in accordance with proper procedures. Importantly, the procurement working group will ensure the prompt gathering and referral to the appropriate authorities of any evidence indicating breaches of policy or law on the part of any individual and will make recommendations for policies, practices and controls needed to enhance procurement processes across government.

At its first meeting on 3 November, the procurement working group looked at some high-level preliminary data that had been extracted by Shared Services SA from a search of known company names provided by the Victorian Ombudsman. This produced around 500 invoices which totalled $921,333 dated from 1 June 2009, which is when Shared Services SA took on the role of paying invoices on behalf of most government agencies.

The analysis showed 41 government entities as having used suppliers identified by early Western Australian and Victorian investigations. Of these 41 entities, there are instances of gifts being received in around half of them, and this will be further investigated. Some show that product vouchers had been issued by the supplier. Product vouchers allow for pre-purchase of printer cartridges for future delivery at agreed prices, which may or may not be inflated. This practice is potentially contrary to Treasurer's Instruction 11. Any evidence of unethical or illegal conduct will be referred by the procurement working group through the appropriate authorities, as is standard practice in such matters.

The government is committed to ensuring that a thorough and transparent investigation is conducted. To facilitate this aim, Ernst & Young was engaged to review the process that I have outlined above to ensure that the utmost rigour is applied in these circumstances. Ernst & Young has assembled two senior consultants who have expertise in fraud investigation, audit and special purpose reporting. Other issues in relation to this process have also been discussed with the Auditor-General, and he has been written to regarding the establishment of the working group.

If the member believes that he has credible information that possibly has not been identified to the government, I invite him to pass that information on to the Minister for Finance for investigation by the procurement working group. I think it is important that we get to the bottom of this. This sort of practice is totally unacceptable. We all should be working together, and any information that anyone may have should be referred to the appropriate forum. Any other issues in regard to the question I will refer to the Minister for Finance in another place.