Auditor General's Report

Auditor-General's Report

The Hon. R.I. LUCAS (Treasurer) (15:25): I move:

That standing orders be so far suspended as to enable the report of the Auditor-General 2017-18 to be referred to a committee of the whole and for ministers to be examined on matters contained in the report for a period of one hour.

Motion carried.

In committee.

The Hon. K.J. MAHER: My question is obviously to the Treasurer. I refer to part B, page 345. Is the South Australian Government Financing Authority guarantee fee set to increase and, if so, by how much?

The Hon. R.I. LUCAS: I am advised that there is a set formula about which the guarantee fees for SAFA are used. We have not changed that particular set formula, but we have not actually crunched the numbers for what the guarantee fees will be for this year. We can take that on notice. We have done it for this particular part of this financial year, from 1 July. We will take that on notice as to what it is. There is a set formula and we have not changed that formula, so I am advised, but we can take it on notice and find out exactly what the result of that guarantee fee calculation was.

The Hon. K.J. MAHER: I refer to Part A, page 13 of the Auditor-General's Report. I think it is 1.8, Proposed changes to controls opinion audit approach. The Auditor-General states that not every public sector agency will have controls opinions audit in the annual report. Has the Auditor consulted with the Treasurer in relation to this change?

The Hon. R.I. LUCAS: My advice is no. The way the Auditor-General goes about his audit functions is entirely a matter for him as an independent officer. My advice is that he has not consulted with us on the detail of that particular matter.

The Hon. K.J. MAHER: Notwithstanding that there has not been consultation to date, does the Leader of the Government in this place have any concern with an approach that might not see each public sector agency have a controls opinion audit?

The Hon. R.I. LUCAS: My advice is we acknowledge that the Auditor-General is an independent officer and it is up to him as to how he conducts it. To answer the member's question specifically, our advice is that we have no specific concern about the way the Auditor-General has gone about his task or indeed the issues that he has highlighted in that part of his annual report.

The Hon. K.J. MAHER: Has there been any request from the Auditor for more funding to enable all agencies to be subject to a controls audit at the same time?

The Hon. R.I. LUCAS: My advice is no.

The Hon. K.J. MAHER: Has there been any funding cut or any efficiencies required of the Auditor-General and, if so, has the Auditor-General indicated what impact this will have on his office's operations?

The Hon. R.I. LUCAS: On my advice, he is one of those lucky parts of government generally that is unaffected by efficiency dividends or savings cuts in this particular budget, so nothing has been applied to him and no concern has been expressed by him, so I am advised.

The Hon. K.J. MAHER: I refer to Part B, page 251. Given the government's stated intention to wind up the Motor Accident Commission, will surplus funds currently held by the commission be directed to the Highways Fund?

The Hon. R.I. LUCAS: My advice is that, if there are any surplus funds, by law they are required to go to the Highways Fund, so we would obviously follow the law of the state.

The Hon. K.J. MAHER: At this point in time, what is the total surplus of funds held by the commission?

The Hon. R.I. LUCAS: We might need to take that on notice. When you say, 'At this point in time', do you mean as of today's date?

The Hon. K.J. MAHER: Yes, as of today's date, or whatever date would be relevant.

The Hon. R.I. LUCAS: Or the most recent date where we might have something.

The Hon. K.J. MAHER: Yes.

The Hon. R.I. LUCAS: We will take that on notice and bring back a reply.

The Hon. K.J. MAHER: Referring to Part A, page 32, why was $146.4 million in funding from the Victims of Crime Fund transferred in June 2018 to fund claims from South Australia's participation in the National Redress Scheme when the estimated start for the scheme is not until February 2019?

The Hon. R.I. LUCAS: I have addressed this particular issue publicly on a number of occasions, but I am happy to repeat what I have said. One of the early questions I asked when I became Treasurer was: given the stated shared goal of providing adequate compensation for victims in this particular area, how much has been set aside for potential compensation claims? I must admit I was stunned when I was told that not one dollar had been set aside by the former government. So, as a member of the new government, we took the bold decision to say, 'Right, we will actually quarantine the current estimated liability, put it aside within SAicorp, within SAFA, in a quarantined, guaranteed fund', and that was the estimated potential liability in terms of compensation.

We wanted to make it quite clear to the people of South Australia and indeed to the government and the parliament that the money was there, it had been set aside and this government could not be accused of not having provided adequately for the current estimated liability in terms of future compensation claims.

The Hon. K.J. MAHER: I refer to Part B, page 473. Given the decision by the government to abolish the Economic Investment Fund, did the Treasurer base this decision on any economic modelling or analysis regarding how this could impact the employment growth rate?

The Hon. R.I. LUCAS: We based the decision in terms of not just that particular fund but a whole range of grant and fund schemes that the former government was enamoured with—I think in the budget speech highlights we listed more than 30 separate fund or grant programs, so not just that particular one. The new government, prior to the election, made it quite clear that we would not continue with that model of jobs growth and economic growth for the state.

We had an alternative model which was based upon lowering the cost of doing business in the state, acknowledging that if our businesses wanted to be nationally and internationally competitive the costs of doing business needed to be nationally and internationally competitive. Secondly, we indicated that, if we were to provide industry assistance, we wanted the industry assistance to be placed with greater emphasis on industry sector support and greater emphasis on support which would assist not just one individual business but groups of businesses.

On a number of occasions I have highlighted examples where—it may be through the provision of a water reclamation project or utility infrastructure support, it might be market gardeners in the lower Mid North or groups of wineries and associated industries in one of the wine-producing regions—the provision of industry assistance in a particular area might assist a group of businesses and industries or an industry sector rather than just an individual company.

I have said it often and I repeat it again: I think it is a quaint notion, given the generally bad odour in which politicians are held, that politicians and public servants—with great respect to our very hardworking public servants—are the best people to decide that a company run by the Hon. Mr Maher deserves a $5 million grant yet a company run by the Hon. Ms Scriven does not deserve a $5 million grant.

We think there should be an emphasis on more broad-based support, as we have highlighted on any number of occasions. Governments will always reserve the right to occasionally provide support to individual companies, and this has already been the subject of questioning earlier in question time today, but there will be much less emphasis on individual company support and much greater emphasis on support for an industry sector or groups of companies.

The Hon. K.J. MAHER: On those occasions that the Treasurer says will not happen very often, where individual companies are provided with funds, does he support some sort of open and transparent application process, or does he prefer the Hon. David Ridgway's process, where a company bowls up and, on any given day on the winds of what is happening, they get funds without any financial criteria?

The Hon. R.I. LUCAS: It will not surprise the honourable leader to know that the Hon. Mr Ridgway and I are absolutely 100 per cent simpatico in terms of our approach to industry assistance. We speak with one voice, we speak from the same hymn sheet, we are in the same ballpark—whatever colloquial expression or metaphor you want to use. We are as one in relation to our approach to industry assistance.

As has been highlighted before, there is a cabinet committee, there is a cabinet-endorsed fund, there are soon-to-be-released cabinet-endorsed guidelines in relation to the operations which will provide some transparency and accountability. However, ultimately, as with any government, individual applications will always be considered by, first, agencies, and then ministers, cabinet committees and/or cabinet processes before a final determination is made one way or another.

All I can say is that I have no fear of being contradicted by any reasonable person when I say that the processes the new government adopts will be much more transparent, much more accountable and, more importantly, much more reasonable, in terms of sensible expenditure of taxpayer dollars, than any process engaged in by the former government.

The Hon. K.J. MAHER: I refer to Part B, page 470. Given that the Consolidated Account recorded an $806 million increase in commonwealth revenue received and a $306 million increase in revenues received from the South Australian government in 2018 compared to 2017, can the Treasurer explain why debt is increasing by millions over the forward estimates?

The Hon. R.I. LUCAS: In large part the budget brought down by the former Labor government forecast increased commitments, which saw a very large projected increase in the level of total public sector debt over the forward estimates period. I think that has been highlighted in the budget speech and in the budget statement.

The new government said in its policy framework document '2036' and in the period leading up to the election that we were prepared to accept a moderate increase in the level of the state's debt as long as it was targeted towards productive infrastructure. That is why we said no to the former government's infrastructure plans that every suburb that wanted to have a tram could have one. Norwood could have one for $250 million to $300 million. North Adelaide could have one for $250 million to $300 million. The western suburbs could have one for $250 million to $300 million.

What we said was that, if we were going to invest in infrastructure which we have committed to do, and if we are prepared to countenance a modest increase in the level of state debt forecast by the former Labor government, we would do so on the basis of productive infrastructure. I note, I must say in concluding, the quixotic nature of the criticism of the Labor government.

Just prior to the budget, we were being attacked and criticised for a valley of death in relation to infrastructure spending, that the new government was going to plunge the state into an infrastructure crisis because we were unprepared to invest in infrastructure. Now that we have done so, we are being criticised for that. We are happy to accept those criticisms because we think it is in the best interests of the taxpayers of South Australia.

The Hon. K.J. MAHER: I refer to Part B, page 420. Given that delays were identified in allocating around $800,000 of members' contributions to member accounts within the Triple S scheme, with the problem expected to be fixed by mid-September 2018, has the problem now been fixed?

The Hon. R.I. LUCAS: It is fair to say that the new government inherited some problems from the former government's oversight of Super SA in relation to a particular IT project. I must admit I have been shaking my head at some of the decisions the former government took. I will take further advice if I can add anything further, but I believe substantially the problems that have been identified in the Auditor-General's Report are well on the road to having been fixed.

There were significant IT issues in relation to a new IT project that was being introduced. There was a range of concerns being expressed by members in relation to the level of service that was being provided by Super SA to members. I shared the concerns of some of those members about the impact on some of those members in terms of the level of service. The latest advice we have had is that they have made significant improvements in terms of addressing those concerns and the leader can rest assured that we will do all we can to correct any of the problems we might have inherited from the former government.

The Hon. K.J. MAHER: On the same part, will a reconciliation occur on these funds to ensure members whose contributions were not allocated correctly receive the appropriate investment return on those funds?

The Hon. R.I. LUCAS: My advice is that, yes, that is the standard practice.

The Hon. C.M. SCRIVEN: I refer to page 382 of Part B: Agency audit reports, which states that naming rights sponsorship for the Adelaide 500 is a 'significant portion of SATC's sponsorship revenue'. Can the minister give a precise value of Superloop's naming rights sponsorship for the race, please?

The Hon. D.W. RIDGWAY: As some background for the honourable member on the naming rights sponsorship, Clipsal by Schneider Electric was the naming rights sponsor for 18 years from 2000 to 2017. The 2018 event did not have a naming rights sponsor. Of course, we know that the Adelaide 500 remains our biggest ticketed domestic motorsport event in Australia. The Adelaide 500 offers significant value for the right partners, and we connect very closely with our audience. Superloop Pty Ltd has been contracted as a new naming rights sponsor for the Adelaide 500.

Superloop owns and operates telecommunication networks, including in-ground fibre, fixed wireless networks, subsea cables and key data centres across the Asia Pacific, and currently employs 350 people in Australia and more than 500 worldwide. Currently, it employs 45 staff in Adelaide, and Adelaide is the lead office of the Superloop broadband and its call centre, which will be based here. Superloop anticipates its workforce will expand to nearly 200 in coming years.

The financial impacts: the six major events managed by the SATC, including the Adelaide 500, the Tour Down Under and the Christmas Pageant, have numerous arrangements with many commercial partners, which are crucial to the critical delivery and success of these events. The value and some details of sponsorship payments may be subject to a contractual duty of confidence. In addition, the SATC does not disclose the details and values of its sponsorship arrangements on policy grounds, based on the commercial sensitivity of the information. Disclosure of the commercial agreements may impact on future sponsorship opportunities or negotiations with the events' valued partners.

The Hon. C.M. SCRIVEN: I thank the minister for that extensive background. Can he at least indicate that the current agreement is at least of similar value to when Clipsal held naming rights?

The Hon. D.W. RIDGWAY: As I said earlier in my previous response, it is commercial-in-confidence. When the member's team was in government before, they were well aware of the figures that Clipsal and Schneider paid to be part of the Adelaide 500. She is, by almost devious means, trying to extract from us an approximate figure. The figure is commercial-in-confidence.

The Hon. C.M. SCRIVEN: On a point of order, Mr Chairman: making injurious reflections upon a member's character, I believe.

The CHAIR: The Hon. Mr Ridgway, it is a reasonable point of order. The point of order is actually debating the question. Please just respond to the question.

The Hon. D.W. RIDGWAY: As I said in my previous answer, it is commercial-in-confidence and we will not be disclosing the value of the contract, other than to say it is fabulous news for South Australia. As I said in a previous question time, the Superloop Adelaide 500 is a great announcement for the state.

The Hon. C.M. SCRIVEN: So as the minister is unwilling to indicate that it was of a similar value, is he at least able to say whether it was greater or less than the previous amount?

The Hon. D.W. RIDGWAY: It seems to be a way of asking the same question. I will repeat the answers I have given many times in this chamber: it is great news for South Australia that we have a naming rights sponsor. Members opposite criticised the announcement a few weeks ago, but they do not know much about the company. That is why companies that are unknown sponsor big events: so they become known. I do not know where the lot opposite have been for the last 15, 16 years. It is about marketing and branding, and I think that is—

The Hon. I.K. HUNTER: Point of order: this is not question time; it is the examination of the Auditor-General's accounts.

The CHAIR: I take the point of order. The Hon. Mr Ridgway, restrain yourself.

The Hon. D.W. RIDGWAY: I did not hear the point of order. We are meant to be examining the accounts. The audit was on the previous years. The Superloop 500 payments and deals are in the next year, so I think it is a bit of a stretch to even allow the questions, Mr Chairman.

The Hon. C.M. SCRIVEN: I would just remind the minister that I was referring to page 382 regarding naming rights, so I think it is entirely within order. How long have the negotiations for Superloop been going on for?

The Hon. D.W. RIDGWAY: I am advised that it is about five months.

The Hon. C.M. SCRIVEN: Were there any potential conflicts of interest that had to be managed through that process?

The Hon. D.W. RIDGWAY: I am advised that there were not any potential conflicts of interest that had to be managed through that negotiation process.

The Hon. C.M. SCRIVEN: Minister, since taking office, how many Treasurer's Instruction 8 briefings from the SATC have you had to either approve or consider?

The Hon. D.W. RIDGWAY: I do not have that figure in front of me at the moment and I do not believe that the team has that figure, so we will take that on notice and bring back a reply.

The Hon. C.M. SCRIVEN: My next questions relate to investment. I do not know if you need to change your advisers. I refer to page 411 of Part B: Agency audit reports. Investment Attraction South Australia provided $14 million in grants. Can the minister advise what was the return on investment on the IASA grants mentioned in terms of jobs created, capital expenditure generated and economic contribution?

The Hon. D.W. RIDGWAY: It is quite an extensive question. We do not have those figures at hand, but as I indicated in a previous answer on tourism I am very happy to take that on notice and bring back a response for the honourable member.

The Hon. C.M. SCRIVEN: I must say that is a bit disappointing from the minister. Is he able to give any contribution with regard to that question at all?

The Hon. D.W. RIDGWAY: My understanding is that the honourable member's question was about the total of the jobs created, the economic benefit of all the $14 million-something dollars of grants. To give the member an accurate answer, it will be more appropriate for me to take that on notice. We do not have all those figures with us and I think it is better that we take it on notice and bring back a reply that answers the honourable member's question.

The Hon. C.M. SCRIVEN: I appreciate, minister, that you will be taking that on notice. Do you know who would have provided the estimate on economic contribution, who would have been involved in providing those figures that you will come back to me with?

The Hon. D.W. RIDGWAY: I am advised that we had an independent analysis done on every project by the South Australian Centre for Economic Studies. I am advised that was done for every project.

The Hon. C.M. SCRIVEN: So an independent third party verifies the return on investment?

The Hon. D.W. RIDGWAY: It is not just the return on investment; it is the economic benefit of the project, so it is broader than just a simple return on investment.

The Hon. C.M. SCRIVEN: From what the minister has just said, I understand that there was a positive benefit, and an independent third party, the South Australian Centre for Economic Studies, has verified this positive benefit, I would take it. Given that it appears to be a success, why has the government abolished the agency?

The Hon. D.W. RIDGWAY: The honourable member would have heard the answer that the Treasurer gave to her colleague the Leader of the Opposition in relation to the new government's plan of abolishing a whole range of grant programs. I think he said there were nearly 30 of them that he outlined in the budget. We have a different approach from the previous government.

It is the new government's policy that we took to the election, and there are always going to be people, like the member opposite, who think that we have not got it right. Time will tell. I expect we have got it right and that we will see some significant economic benefits flow from the new government's policies. We are already seeing significant business confidence and economic confidence in the state as we speak.

The Hon. C.M. SCRIVEN: Do you expect the new department to surpass the results of the IASA?

The Hon. D.W. RIDGWAY: I expect that over time we will see significant stronger growth in the South Australian economy on a whole range of fronts. The new agency has a whole range of activities: immigration, international education, investment, trade and, of course, tourism. All indicators are that strong economic growth is starting to emerge and we will see that continue with the support of strong economic government policies.

The Hon. C.M. SCRIVEN: Will the same independent economic evaluation be performed on the new department?

The Hon. D.W. RIDGWAY: I am advised it will be a different process that we will engage in but, nonetheless, it will be a robust process that will make sure that taxpayers' dollars are wisely spent.

The Hon. C.M. SCRIVEN: What will that different process be?

The Hon. D.W. RIDGWAY: As the Treasurer answered in a previous question about the guidelines and the process, it is a cabinet-approved fund. We do have a cabinet-approved committee and, as I think he said only 15 minutes or so ago, there will be a cabinet-endorsed set of guidelines, and the process will be outlined shortly. When that has been approved by cabinet, we will make that available to members opposite.

The Hon. C.M. SCRIVEN: Is the minister saying that cabinet and departmental officials have more technical expertise relevant to this area than an industry advisory board?

The Hon. D.W. RIDGWAY: No, I did not say that. That is putting words in my mouth. I said there is a different process and the guidelines will be released when the cabinet approves them shortly. I am happy to take questions from the honourable member when those guidelines have been released.

The Hon. C.M. SCRIVEN: Since taking office, how many Treasurer's Instruction 8 briefings from DTTI or IASA have you, minister, had to approve or consider?

The Hon. D.W. RIDGWAY: I think that was Treasurer's Instruction 8. Again, I do not have that figure in front of me at the moment, so the same as with tourism, I think it would be wise for us to take that on notice and bring back a response rather than give an inaccurate response today.

The Hon. C.M. SCRIVEN: My next question is in regard to international education. I refer to StudyAdelaide financial statements provided to the Auditor-General, note 2, objectives and activities: describe StudyAdelaide's function to engage in marketing and promotional campaigns to make Adelaide an attractive destination for international students. Can you advise what projects the increased funding to StudyAdelaide in this year's budget will support?

The Hon. D.W. RIDGWAY: It will be a little change of focus away from destination marketing, working more in the market to look at where we can get extra students. Obviously, China is a huge opportunity for us: 41 per cent of our students now come from China. I met this morning with the ambassador to Thailand and there are some great opportunities there. We are actually changing the approach from marketing Adelaide as a destination as more in-market activities. There is also career pathways, where we are trying to look at opportunities for international students to gain job opportunities and careers here.

We also have the ministerial advisory council on international education that has been established, looking towards what our targets should be. Clearly, we have about 35,000 international students who contribute $1.5 billion to the state's economy each year. There is a significant opportunity to grow. We have fallen behind the rest of the nation, which is, sadly, a common phenomenon. In the last 16 years, we have fallen behind the rest of the nation, so there is an opportunity to catch up a bit of the lag time. We are keen to focus on—

The Hon. C.M. SCRIVEN: Point of order, Mr Chairman. I am aware of the time. The specific question was about what projects. If there are no specific projects, that is fine, but I would like to move on to the next question.

The Hon. D.W. RIDGWAY: I was just trying to outline how important the sector was, but if the member does not wish to hear that I will take my seat.

The Hon. C.M. SCRIVEN: I am aware of the importance; I wanted some specifics. When did the Adelaide Engage—Work Experience Network project first begin, and can you provide a full breakdown of which organisations and businesses are participating in that project?

The Hon. D.W. RIDGWAY: Only recently, in answer to a question asked in this chamber, I gave a breakdown of the number of businesses that were involved in the most recent one. To get a full list of all the businesses that have been involved and the outcomes, I will take that question on notice for the honourable member.

The Hon. C.M. SCRIVEN: The first part of the question was when that project began development.

The Hon. D.W. RIDGWAY: I do not have the exact date with me. Again, I will get the exact date—take the question on notice and bring back an answer.

The CHAIR: That completes that section. The Leader of the Opposition.

The Hon. K.J. MAHER: I refer to Part A, page 34. The Auditor-General notes the government's commitment to have LHN boards fully operational by July 2019. The Auditor-General has raised concerns that this deadline will be challenging—I think the word is—to meet. Given this warning from the Auditor-General, does the minister remain steadfastly committed to this deadline?

The Hon. S.G. WADE: The government is still aiming for 1 July and we have an extensive program of consultation and training to achieve that deadline.

The Hon. K.J. MAHER: The minister previously told parliament that a second tranche of legislation is due at the end of this year. I understand that he has now told a briefing that has been delayed and will not be introduced until something like March 2019, many months afterwards. What happens to the government's proposed reforms and the functions and authority of the various boards if this legislation is not passed and enacted before July 2019, or at all?

The Hon. S.G. WADE: My understanding is that the stage 1 legislation gives all of the enabling elements. The board chairs have all already been appointed. Expressions of interest for the board members closed recently and selection processes for the board members will ensue shortly. I would describe the stage 2 legislation as fleshing out the governance and accountability framework, not providing the essential elements for the operation of the boards.

The Hon. K.J. MAHER: What elements have not been decided that means the government's legislation cannot be introduced this year, as was promised?

The Hon. S.G. WADE: I would not characterise it is a promise: I would characterise it as an expectation. The fact of the matter is that the government is orderly progressing its development of the framework. A key element of the current discussions is the discussions within the department, within the local health networks, with the board chairs, with other stakeholders, about, shall we say, the distribution of functions and responsibilities.

There is a diversity of models used throughout Australia and, just as we did with stage 1, we are looking at the best practice in every jurisdiction. One of the benefits of the lazy reform approach of the former government is that we are the last jurisdiction in Australia to take on board governance for local health networks in Health and so we have the benefit of drawing not only on a diverse range of legislative frameworks but also a diverse range of departmental and other structures.

The Hon. K.J. MAHER: What level of the financial decision-making will the boards be given and what expenditure will remain under central control?

The Hon. S.G. WADE: Of course, the health portfolio will need to continue to operate within the financial framework of government as a whole, but within the health portfolio I think it would be fair to say that the commitment of the government and the intention of the department is that, to the greatest extent responsibly appropriate, we will maximise the authority of the local health networks.

The Hon. K.J. MAHER: Can I just confirm that expressions of interest for board memberships have closed?

The Hon. S.G. WADE: I will correct this if I need to, but my understanding is that they closed on 5 November.

The Hon. K.J. MAHER: If they closed on 5 November, why then, on page 13 of The Advertiser on Saturday 10 November, were they seeking nominations for such positions? It would seem a bit odd, five days after they closed, to have an ad in the paper seeking nominations. Can the minister please explain that?

The Hon. S.G. WADE: I cannot explain that, but I will take that on notice and let you know. Certainly, our recollection was the 5^th, but, as I said in the answer to my previous question, if I am mistaken I will correct the record.

The Hon. K.J. MAHER: Once the expressions of interest had closed, were there enough expressions of interest for each vacant position?

The Hon. S.G. WADE: My understanding is that the positions, shall we say, were significantly oversubscribed.

The Hon. K.J. MAHER: So they were oversubscribed, yet it seems it was continued to be advertised after nominations closed, is that correct?

The Hon. S.G. WADE: I would be interested to look at the paper that the honourable member refers to.

The Hon. K.J. MAHER: Will the minister take that on notice and bring back a response as to why that has occurred?

The Hon. S.G. WADE: I have already taken it on notice.

The Hon. K.J. MAHER: In relation to Part B, page 112—and I suspect the minister may have further and better information that he can update the house with as we progress along here if he has more information about the taxpayer-funded placement of ads in the paper after positions had already closed. If he does get that I would be grateful if he could update as we are going along. He may have some more so I will give him an opportunity now before we move on.

The Hon. S.G. WADE: Did you want to talk to page 112?

The Hon. K.J. MAHER: No, I was asking if you had further information about the ads in the paper, if you wanted to update.

The Hon. S.G. WADE: I have taken it on notice; this is not a role when you take it on notice.

The Hon. K.J. MAHER: If he has further and better information and wants to bring it back as we go, I would invite him to do so, to update the house as soon as possible.

The Hon. S.G. WADE: If the honourable member wants to adjourn the house—

The Hon. K.J. MAHER: In Part B, page 112, the Auditor-General notes that the minister's governance changes 'will present challenges, particularly given the relatively small size of some of the regions and existing centralised processing and control frameworks'. Given the board is coming into operation in a few months, what Country Health functions will remain centrally controlled and what will be devolved to the six LHNs?

The Hon. S.G. WADE: The Auditor-General, of course, was accurate in noticing the challenges of devolution. The fact of the matter is, devolution will also produce great opportunities. It will lead to significant clinical and community engagement. In the context of the Auditor-General's consideration, if you like, financial management, we also believe that it will significantly enhance the financial accountability. In the Auditor-General's health budget performance 2017-18, report 8 of 2018, the Auditor-General highlights a whole series of elements of a governance framework in a board context. We believe it will significantly strengthen accountability.

The Hon. K.J. MAHER: What decisions remain to be made? Given we are only a few months away from the functions being decided, what functions will remain centralised and what will be devolved? What specific functions will those small LHNs be responsible for and what will be retained centrally?

The Hon. S.G. WADE: I actually take a different view. This perhaps might be the difference between a glass half full and a glass half empty approach, but we are eight months into this government, we are eight months away from the commencement of the full operational authority of the regional boards. In those eight months since this government was elected, we have put in place the key governance legislation, which was passed in this house at the end of July.

We have selected ten board chairs. We are well on the way to appointing the rest of the board chairs. A lot of very valuable work has been done within the department, within government, with our stakeholders on fleshing out that framework. I agree that it is a challenging task between now and 1 July, but considering the great work done by my department and its stakeholders I am very confident that we will deliver the second eight months as well as we have the first.

The Hon. K.J. MAHER: Oh dear, we will see more ads in papers after positions have closed, I guess, if that is as good as it gets for the first eight months.

The CHAIR: Leave the commentary; we are on the clock.

The Hon. K.J. MAHER: Thank you, Mr Chairman, I appreciate that. In relation to Agency audit reports, page 205, Part B, Significant events and transactions, the Auditor-General notes the establishment of the task force to develop a fully costed plan to build a new women's and children's hospital. Is the task force still set to finalise their report in December of this year?

The Hon. S.G. WADE: I have received recent updates. In that recent update, I was led to believe that it is still on track to deliver its findings before the end of the year.

The Hon. K.J. MAHER: When will the report be publicly released?

The Hon. S.G. WADE: When the government has given it due consideration.

The Hon. K.J. MAHER: Will the full report be publicly released?

The Hon. S.G. WADE: That is my expectation.

The Hon. K.J. MAHER: What sites is the task force currently considering for a co-located hospital?

The Hon. S.G. WADE: I have not received a report.

The Hon. K.J. MAHER: Has the minister had any indication, advice, briefings or otherwise about where sites are being considered?

The Hon. S.G. WADE: I have had discussions with both my department and members of the task force on a range of possible sites. I do not know what sites are currently being considered by the task force. I do not know what sites will be included in the final report.

The Hon. K.J. MAHER: I thank the minister for taking on notice the sites that are being considered, and he will bring that back. Has the minister seen or been given any advice on costings or preliminary cost estimates for the new hospital resulting from this task force?

The Hon. S.G. WADE: I certainly have not received any cost estimates from the task force.

The Hon. K.J. MAHER: Has the minister received any briefings or advice at all from his department or from other places as to preliminary cost estimates for a new hospital?

The Hon. S.G. WADE: I have received a number of briefings in relation to the Women's and Children's Hospital.

The Hon. K.J. MAHER: Will the minister bring back a reply in relation to what those estimates might be?

The Hon. S.G. WADE: There have been a range of briefings, a range of estimates. I would suggest that the council might be best served by the final report of the task force and the government's decision on it.

The Hon. K.J. MAHER: Well, if you release it. I refer to Part A: Executive summary, pages 59 and 60. The Auditor-General goes into detail about how the NDIS delays and issues with the rollout placed pressure on the health system, including on mental health. What is the difference between the pre-NDIS funding previously provided for mental health clients under block funding arrangements and the current funding provided under the combination of the NDIS package and the national psychological measure?

The Hon. S.G. WADE: The details we do not have with us; I am happy to take that on notice and bring back information for the honourable member.

The Hon. K.J. MAHER: This may be taken on notice then: how does that affect the continuity of support funding?

The Hon. S.G. WADE: In terms of the continuity of support funding, the state government is determined to meet its obligations under the NDIS agreement with the commonwealth to work with the commonwealth for continuity of care. We believe we are doing everything we can to support continuity of care, but we have had, and have had for some time, significant concerns that the commonwealth is doing its bit.

The Hon. K.J. MAHER: The Auditor-General further notes that state hospital bed expenditure will be required for clients who would otherwise have been managed by an NDIS plan. How many mental health patients are currently in our hospital system that could otherwise be supported outside of hospital under an NDIS plan?

The Hon. S.G. WADE: We will certainly seek further details. In relation to the NDIS generally, my recollection is that we are talking in the order of 110 patients in our hospitals whose discharges cannot be completed because they are still waiting for some element of the NDIS process to be completed. In relation to mental health clients, I will take that on notice and also clarify to what extent they are included in the 110 or excluded from the 110.

The Hon. K.J. MAHER: What actions has the minister himself taken to put pressure on the federal government to address the delays for patients who should be on the NDIS in this regard?

The Hon. S.G. WADE: As I indicated earlier, both myself and my honourable colleague the Minister for Human Services have long held concern that the commonwealth is not doing all it should be doing in terms of ensuring continuity of care. In that context, I wrote to the commonwealth ministers for health and human services on 15 June about the transition of their services and clients to the NDIS. The impact of this on the state is becoming apparent over time, and specifically to monitor the impact I asked the South Australian Chief Psychiatrist to establish a task force to provide detailed information and advice regarding the interface between mental health and the NDIS, both during the transition period and at full scheme.

The terms of reference of the task force are to monitor the impact of NDIS transition arrangements on both clients and service providers, with a particular focus on continuity of service to clients; secondly, to advise on appropriate action to address continuity of service, and that would include necessary remedial actions by services, programs and jurisdictions; and to identify future issues that may arise. That task force first met on 28 June. It has broad membership across the sector, including, I am delighted to say, the commonwealth. When the Chief Psychiatrist and I first discussed it, we were not confident that the commonwealth would come to the table. I am delighted that they have.

I have mentioned the fact that I wrote to the commonwealth ministers in June. I requested the Chief Psychiatrist establish a task force, which was also established by June. On 2 August 2018, at the COAG Health Council meeting, I also proposed that the council monitor the ongoing transition to the NDIS of mental health clients and identify any emerging service gaps that need to be addressed in order to ensure continuity of support.

All jurisdictions agreed to this proposal, and I thank my fellow ministers and the council for their support. Ministers also agreed that the Australian Health Ministers' Advisory Council work with the Disability Reform Council's Senior Officials Working Group on monitoring the effects of the transition to NDIS of people with psychosocial disabilities.

The Hon. K.J. MAHER: How many patients in total are currently in our hospital system who could otherwise be supported outside of hospital under an NDIS plan?

The Hon. S.G. WADE: My answer is the same as the one I gave a few minutes ago, which is that my understanding is that about 110 patients are in our hospitals whose discharge is being delayed because of the lack of availability of some element of the NDIS.

The Hon. K.J. MAHER: Just to confirm that is not waiting for discharge, but the total in the hospital system who could otherwise be on an NDIS plan, the estimate is 110?

The Hon. S.G. WADE: It is almost impossible to know. There would be a lot of patients who are in there for, shall we say, episodic medical care who might be fully entitled to an NDIS package but who have not been assessed, have not been granted a package. All I can tell the member is that the advice I have been given is that there are about 110 whose discharge is being delayed because of the NDIS. That could be delayed because they are yet to receive an assessment; often it will be because of, if you like, the supply of services against an NDIS package.

To try to be fair to the commonwealth—and I try to do that from time to time—some of those patients will be waiting for NDIS-related building modifications. Building modifications take time and that is not going to change; we could get the NDIS and the state agencies working together perfectly but we would still have to take time to modify buildings to accommodate people. In terms of an overall statement, including the building modifications group, my understanding is that it is in the order of 110.

The Hon. K.J. MAHER: In Part A: Executive summary, page 74, the Auditor-General notes that duress alarms are an outstanding issue at the RAH. By what date will the duress alarms be fixed and by what date will all 10 of the mental health beds be open?

The Hon. S.G. WADE: I totally concur with the question. I am incredibly frustrated—

The CHAIR: You cannot concur with a question.

The Hon. S.G. WADE: I will concur and try to answer it at the same time—

The Hon. K.J. MAHER: All you need is a date, to answer the question.

The Hon. S.G. WADE: If the honourable member is looking for a date I cannot give him one.

The Hon. K.J. MAHER: Then why did the minister, on 19 July, say that there is now an agreed-upon solution, and told the parliament on 4 September that the time frame for completion of that upgrade is 10 weeks, a time frame that has now passed? Why has he said this in the past if he has given, as they say, one of those rock solid guarantees that the minister and his colleagues are fond of giving?

The Hon. S.G. WADE: I am advised that the fault that was being worked on in July has been rectified, but subsequent faults have been identified.

The Hon. K.J. MAHER: What are those subsequent faults, and what is the new date for them to be fully rectified?

The Hon. S.G. WADE: I am advised that the fault we are currently working on relates to a latency issue; in other words, a delay between activation and recognition. We do not have a date as to when it will be rectified.

The Hon. K.J. MAHER: Will the minister undertake to check the parliamentary record from 4 September to see whether he has inadvertently misled parliament, and come back and answer that? I refer to Part B: Agency audit reports, page 124, Procurement of centralised contracts for hotel services. How did the government arrive at a savings figure of $20 million out of the procurement of two centralised contracts for hotel services? Have any services or beds been cut to achieve these savings?

The Hon. S.G. WADE: I feel constrained by the Chair from wandering into highlighting the hypocrisy of Labor asking questions about privatisations of hotel services. But being chastened by the Chair's presence alone, I would advise the member that the hotel services that were contracted in the new phase were similar to the hotel services contracted under his government.

The Hon. K.J. MAHER: Will the minister confirm that there is a savings figure of $20 million out of the procurement of the two centralised contracts for hotel services? Page 124, Part B.

The Hon. S.G. WADE: I am advised that that is the advice the department provided.

The Hon. K.J. MAHER: Is the minister trying to tell us that they have been able to achieve a saving of $20 million out of the goodness of the heart of the commercial providers of these services, or is there a change in the nature, scope of the services or beds being cut to achieve these savings?

The Hon. S.G. WADE: I will seek further advice.

The Hon. K.J. MAHER: The Auditor-General details how the probity advisers for these contracts did not provide a report communicating their findings. Can the minister confirm that probity requirements were indeed met for these contracts? If not, why not?

The Hon. S.G. WADE: What I will do is quote from the next page, page 125, that the Department for Health and Wellbeing:

…advised it had subsequently obtained a probity report for the hotel services procurement which would be provided to the Executive Director Procurement and Supply Chain Management by October 2018.

The Hon. K.J. MAHER: The minister confirms that before awarding these contracts, a probity report was not provided? Is that what the minister is confirming?

The Hon. S.G. WADE: The report was provided subsequently.

The Hon. K.J. MAHER: Is it usual practice to have probity reports provided after the awarding of contracts?

The Hon. S.G. WADE: I am advised that it is not.

The Hon. K.J. MAHER: Are there any other instances of probity reports not being provided to the awarding of contracts across SA Health that the minister or his people are aware of?

The Hon. S.G. WADE: It is a very broad question. I am not able to answer that.

The Hon. K.J. MAHER: Will the minister take that on notice and bring back a reply, please?

The Hon. S.G. WADE: I am happy to do so.

The Hon. K.J. MAHER: In relation to Agency audit reports, page 116, National Health Reform Agreement (NHRA), this section refers to the financial arrangements that were established under the NHRA. What is the difference between the hospital funding levels that would have been provided to South Australia under the Gillard government's NHRA and the current proposed NHRA for this current financial year and over the forward estimates?

The Hon. S.G. WADE: I think that might be a law student's example of a hypothetical question.

The Hon. K.J. MAHER: Is the minister confirming that no-one in his department has done any modelling on this whatsoever that he is aware of?

The Hon. S.G. WADE: I did not say that.

The Hon. K.J. MAHER: Is the minister aware of any modelling that has been done on this at all?

The Hon. S.G. WADE: No.

The Hon. K.J. MAHER: The minister is saying he is not aware that any modelling has been done on this.

The CHAIR: You are asking if the minister is aware. That is the minister's answer.

The Hon. S.G. WADE: I can assure you I am not aware of such modelling.

The Hon. K.J. MAHER: Has any modelling been done by the department on this?

The CHAIR: We got there!

The Hon. S.G. WADE: Apparently the previous government has.

The Hon. K.J. MAHER: Will the minister table any modelling that he is able to be provided by the department?

The Hon. S.G. WADE: I would suggest that he speaks to the honourable member for Kaurna, the assistant health minister under the failed former Labor administration—

The Hon. I.K. HUNTER: A point of order, Mr Chair: again, the minister is entering into debate when he should be answering the questions of the Leader of the Opposition.

The Hon. S.G. WADE: —or the member for Croydon, the failed health minister in the former Labor government.

The CHAIR: It is a fair point of order and I am also applying it to the Leader of the Opposition.

The Hon. K.J. MAHER: In relation to Part B, page 200, what action has been taken following the Auditor-General's revelations that SALHN has no processes whatsoever to track medical officers' claims for professional development leave?

The Hon. S.G. WADE: I am yet again surprised that the Leader of the Opposition wants to highlight the mismanagement of the former Labor government, but let me give the answer nonetheless. The new Liberal government is determined to clean up the mess left to us by the former government, and we are currently working on a system that will allow us to monitor both claims and timing. We are consulting with the employee organisations to that end, and I can assure the honourable member, before he asks his supplementary, that it will be applicable across the LHNs and not just to SALHN.

The Hon. K.J. MAHER: If officers have taken more professional development leave than they are entitled to, will they be required to pay back the leave hours they have taken over and above their entitlements?

The CHAIR: Probably the better way to ask the question would be: has a decision been made? That is for the education of the Leader of the Opposition.

The Hon. S.G. WADE: I am advised that it would be the normal expectation that it would be repaid.

The Hon. K.J. MAHER: In relation to page 184, Audit findings and comments, the Auditor-General notes that SAAS was undertaking improvements towards legacy revenue systems, and that these would be completed by October this year. Has that occurred?

The Hon. S.G. WADE: I am happy to take the honourable member's question on notice.

The CHAIR: Time for committee has expired. I conclude the examination of the Auditor-General's Report.