Auditor General's Report

Auditor-General's Report

The Hon. R.I. LUCAS (Treasurer) (15:26): I move:

That standing orders be so far suspended as to enable the report of the Auditor-General 2018-19 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. C.M. SCRIVEN: My first questions relate to 'State finances and related matters' 1.2.1, pages 1 and 2. The Auditor-General raised the issue that South Australia's non-financial public sector net debt to revenue ratio is expected to be higher than all other states by 2022-23. Does this concern you, and does it concern you in the context of our slowing economy?

The Hon. R.I. LUCAS: No, it does not. I should not underestimate the importance of the views of the state treasurer, but more importantly than that are the views of the credit rating agencies. Standard & Poor's and Moody's are, of course, the independent arbiters of the fiscal responsibility or otherwise of state and commonwealth governments. Whilst I do not have the exact words, I have quoted them before: both rating agencies, on the basis of the budget documents, essentially said that the level of the debt, whilst it had increased significantly not only in South Australia but in other states, was manageable. One of the ratings agencies was even kind enough to refer to the relatively strong financial performance management record of the state government.

With that, the simple answer to the question of whether I am concerned is no, and certainly, no, I do not believe that it is responsible in any way for any issues our state economy is confronting. In fact, quite the reverse: I think that the alternative view which the Labor Party is prosecuting, that in some way we should not increase our state debt, would lead to a very significant reduction in our public sector infrastructure program on schools, hospitals and roads. That is the natural consequence of the position the Labor Party is prosecuting. That would put a massive handbrake on jobs growth in our construction sector in South Australia and lead to a drastic slowing in the state's economy.

From the government's viewpoint, we are strong supporters as we transition to the big defence and shipbuilding and space-related jobs of the future. We are strong supporters of a transitional program of strong public sector infrastructure. A $12 billion public sector infrastructure program over the next four years is an important element in continuing a strong construction sector and strong jobs growth as we transition to the jobs of the future.

The Hon. C.M. SCRIVEN: Given the Treasurer's discussion of debt, does he have a definition of what is a sustainable level of debt?

The Hon. R.I. LUCAS: Yes, I do. The level of debt that we have at the moment, in our view, is sustainable and, more importantly, in the view of the rating agencies it is manageable and sustainable. I do not want to waste the precious 15 minutes that we have in the Auditor-General's time—I have quoted the figures before—but the growth in debt in most of the other states is at our level, the percentage growth, or indeed in many cases significantly higher than the growth of debt in South Australia.

All states, Labor and Liberal—I chaired the Board of Treasurers meeting on Friday in Adelaide and all treasurers reported that they were implementing significant increases in their state debt and that they are doing so in the climate of historically low interest rates. We had the benefit of the presentation at the Board of Treasurers of the Governor of the Reserve Bank, Dr Philip Lowe. He made it quite clear that, in the Reserve Bank's viewpoint, the historically low interest rates that we are currently seeing are here for quite some time.

The Hon. C.M. SCRIVEN: At what level does debt become unsustainable?

The Hon. R.I. LUCAS: I am not going to put a particular level on that. All I can say is the level of debt that this state government is envisaging for the foreseeable future in the forward estimates is sustainable. The level of debt that I suspect would be unsustainable would be if you ever had the misfortune of having another Labor government that would not be able to manage the—

Members interjecting:

The Hon. R.I. LUCAS: In and of itself it would just be the natural corollary of having a Labor government, which is unable to manage its net operating account, unable to operate the operating balances and spending more than it earns on an annual basis—that would be my definition. It is a layperson's definition of what is unsustainable. Certainly, the level of state debt under a Labor government, whatever it was, would be unsustainable because they would not be able to service it through a manageable, fiscally responsible budget process.

The Hon. C.M. SCRIVEN: Referencing the Executive Summary of the Annual Report, page 25, 2.2.1, Return To Work Corporation of South Australia liability has increased. Which private companies have approached the government to take over the Return to Work scheme in the event that it is privatised?

The Hon. R.I. LUCAS: The government announced, prior to the election—and on any number of occasions since the election—that we are not going to implement a policy of privatisation of the Return To Work scheme. That was the government's clear policy position prior to the election. We announced it in relation to two specific bodies, the only two that had expressed some interest—sorry, interest, I am sure, had been expressed to the former government before the election, but that was SA Water and ReturnToWork SA. Prior to the election we indicated that we would not be selling off either SA Water or ReturnToWork SA.

True to our word, as we have been in keeping our election promises, we have kept true to that particular promise that I made in blood to the PSA, to my very good friends and comrades in the PSA. I said that we would not be doing that but we would reserve the right to outsource and commercialise, as the Labor government had done, and we kept that promise as well. We have outsourced and we have commercialised where it is in the public interest to do so, but we have not broken our promise in relation to the sell-off of SA Water or ReturnToWork SA.

The Hon. F. PANGALLO: Can the Treasurer or his CE provide a list of all ex gratia payment schemes controlled by the government? Which ones are subject to commonwealth taxation requirements? Which are not or will not be subject to taxation obligations to the commonwealth's Australian Taxation Office and not include employment terminations?

The Hon. R.I. LUCAS: I am a very generous Treasurer and I am not sure that is actually a question from the Auditor-General's Report. But being as generous as I am to the Hon. Mr Pangallo, because he is such a nice person and he is always kind to me and always says nice things to me, I am happy to take that particular question on notice to see what information I might be able to provide to the honourable member in the interests of camaraderie and good spirit that we have as we near the Christmas season.

The Hon. C.M. SCRIVEN: Returning to the previous question, have any private companies approached the Treasurer or the government expressing interest in taking over ReturnToWorkSA?

The Hon. R.I. LUCAS: Not that I recall. But even if they had, the answer is clear: no.

The Hon. C.M. SCRIVEN: Returning to state finances and related matters, Treasurer, are you concerned with recent state accounts which show South Australia's gross state product only grew by 1.4 per cent in 2018-19?

The Hon. R.I. LUCAS: I think I share all South Australians' concerns that our state economy needs to be growing at a much faster rate. Sadly, for the last 20 years, labouring under a discredited former Labor government, our state growth rate has been roughly about half the growth rate, on occasions, of the national growth rate. Our employment growth has been roughly half the national growth rate on some of those occasions; I am not saying for the whole 20 years. Certainly, our population growth has been roughly half for good parts of that last 20 years. That is unacceptable to the government; we have indicated that.

We have a stronger ambition and vision for South Australia. We see nothing wrong with South Australia growing population-wise closer to the national growth rate. We have an ambition to have our economic growth rate, the GSP, growing much closer and at the national growth rate, and we want to see our employment growth growing at the national growth rate. Everything that we are doing is geared towards policies to that end.

In the end, as I have said on many occasions, we have to export more. To do that, our businesses have to be nationally and internationally competitive. For that to happen, we need the cost of doing business in South Australia to be nationally and internationally competitive. That is why we have abolished payroll tax for all small businesses. That is why we have had a $90 million cut per year in ESL. Credit to the former Labor industrial relations minister John Rau, and we supported it, workers compensation premiums have come down from just under 3 per cent. This year it will be down to 1.65 per cent.

That is why from July next year we will unravel the atrocious policies of the Labor government in relation to water pricing for households and businesses and drive down water prices in South Australia because the former Labor treasurer ratcheted up the regulated asset base of SA Water by more than half a billion dollars. Why? Because he wanted more money as a greedy, rapacious former Labor treasurer in the state budget through dividends and income tax equivalents. To get that, he was quite happy to jack up the price for households, struggling South Australian families and businesses.

That is why we are driving towards an interconnector to help drive down electricity prices, which have been a jobs killer in South Australia. In everything this government does, as we wake up in the morning, as we go to bed at night, we are thinking and dreaming of ways of driving down the costs of doing business in this state. We want to see jobs growth, we want to see economic growth, we want to see population growth. That is what this government is about. Our Premier reminds us of it every week—a bias to yes, let's get things done in South Australia—and that is a remarkable change from the lethargy, the apathy and the incompetence and negligence of the former Labor government.

The Hon. C.M. SCRIVEN: Is it correct, Treasurer, that at the time of taking the decision to increase state debt by record levels gross state product was estimated to grow by 2 per cent in 2018-19?

The Hon. R.I. LUCAS: The two issues are not related at all. In relation to the decision to increase the state debt, it was a decision taken in the light of a softening national economy; a softening state economy; a Reserve Bank governor saying that state governments and territory governments have to do more in terms of publicly funded infrastructure; a Reserve Bank that was driving down interest rates; a commonwealth government driving down income tax collections in Australia; and state governments, Labor and Liberal, across the nation saying, 'What we can do is bring forward and increase publicly funded infrastructure to try to get jobs growth and economic growth in our economy.' That was what state governments could do.

The Labor Party—and they are entitled to their particular views—say, 'Stop the school projects, stop the health projects, stop the transport projects because there is something wrong'—

The Hon. C.M. Scriven: We have got record debt.

The Hon. R.I. LUCAS: That is right, you are saying that. The corollary of that is to stop the Women's and Children's Hospital expansion, stop the school expansions that we are doing, stop the work we are doing at Flinders, stop the work we are doing at the Lyell McEwin, stop the work that we are doing at The Queen Elizabeth, stop the work we are doing on the congestion-busting road projects and stop all the regional project works in regional areas that we are doing in terms of road widening, overtaking lanes and road resurfacing.

We have committed to spending hundreds of millions of dollars in those areas because we want to see jobs growth and we are prepared to incur additional debt. It is the Labor Party grinches and flinchers over the other side of the chamber who say, 'We will stop all of that because we want to be the only government'—if they were elected—'that would stop that sort of publicly funded infrastructure.'

The CHAIR: The Minister for Trade, Tourism and Investment.

The Hon. C.M. SCRIVEN: I refer to advertising and promotions on page 385 of the report. The Auditor refers to the cuts to advertising and promotions. Can the minister specify what promotions and advertising activities were cut, or was it only to the China ambassador campaign?

The Hon. D.W. RIDGWAY: I thank the member for her question. The SATC delivered approximately $1.4 million in operational savings for the 2018-19 year. The savings target was achieved by the cessation of one-off activities and short-term projects, which occurred in 2017-18, such as the production and film shoot expenses associated with the Chinese brand ambassador project, SATC's signage and wi-fi project—we provided free wi-fi connectivity at some of South Australia's most iconic and remote locations—new signage and operational efficiencies across the SATC. The SATC has achieved its savings target for 2018-19.

The Hon. C.M. SCRIVEN: What was the rationale for cutting these particular programs?

The Hon. D.W. RIDGWAY: The rationale would have been because in the tough budgetary environment we find ourselves with diminishing GST, the board of the Tourism Commission made a judgement that to achieve the savings targets we could make these particular cuts and still drive a strong growth in the visitor economy. As members would be well aware, I have said on a number of occasions we are delighted now that we are at $7.6 billion for the visitor economy in the state. Clearly, the judgement exercised by the board and the hardworking executive team at the South Australian Tourism Commission has not impacted on the visitor economy. It continues to hit record highs.

The Hon. C.M. SCRIVEN: So the rationale purely was, 'Cut because you need to find savings'? There was not any particular reason for these; is that correct?

The Hon. D.W. RIDGWAY: As I said, the Tourism Commission has to operate within the budget that is given to them. They made a judgement that these cuts would not impact on the visitor economy. As I repeat, at $7.6 billion and growing, clearly they have made the right call. We have still been able to achieve significantly stronger growth than we have seen in past years and we have also been able to deliver these savings back to Treasury.

The Hon. C.M. SCRIVEN: Is anything replacing the China ambassador campaign that might achieve similar outcomes?

The Hon. D.W. RIDGWAY: We have a whole range of operational things, of course. We have our ongoing campaign with our ambassador, Huang Xiaoming, in China. I cannot recall off the top of my head the number of followers he has on social media but it is in the hundreds of thousands.

The Hon. C.M. SCRIVEN: The minister is referring to an ongoing program. My question was in regard to something that might replace the program that was cut—the China ambassador campaign.

The Hon. D.W. RIDGWAY: I was answering that we have an ongoing program that is working particularly well, and that is successful. He is a superstar in China and attracts a significant following on social media and he continues to deliver for the South Australian visitor economy. I repeat the previous answer: the team and the board and the hardworking executive team at the South Australian Tourism Commission have made a decision that they could sustain removing that particular Chinese ambassador program and still grow the visitor economy.

I think that is the underlying issue with this, that we are about trying to grow the visitor economy to meet more jobs and more spending in South Australia, and we are achieving that. At this point in time, I do not believe there are any firm decisions made to replace that particular program. Nonetheless, that will be an operational matter for the Tourism Commission to look at the figures. As our numbers continue to grow, I think they have made the right decisions.

The Hon. C.M. SCRIVEN: I refer to page 384, reviewing expenditure on advertising. What is the approval process for SATC promotions?

The Hon. D.W. RIDGWAY: We have an approvals process. All government advertising—tourism and all government agencies—goes through an approval process, which is the GCAC, I think it is called. That is a process that all advertising goes through. The Tourism Commission and other agencies put up their creative ideas and their advertising campaigns. The process involves registration, including a comprehensive communications plan; a submission of creative concepts, including results from concept testing; followed by the submission of final creative and budgets with ministerial approval. It is quite an exhaustive process that it goes through, and it is not just the Tourism Commission, it is all government advertising.

The Hon. C.M. SCRIVEN: Can I confirm that GCAC signed off on all promotions within the minister's remit for the past period?

The Hon. D.W. RIDGWAY: In one sense, yes, but it has only been in place since 1 July. This is the Auditor-General's Report for up to 30 June this year. Effectively, this process was not in place during any of the time that we are looking at in this Auditor-General's Report.

The Hon. C.M. SCRIVEN: Can the minister advise what the approval process was for SATC promotions during the period related to the Auditor-General's Report?

The Hon. D.W. RIDGWAY: It was a similar process, I am advised. It was called the CAP process, which was a similar process, but this more formal GCAC one is the one that has been in place since 1 July.

The Hon. C.M. SCRIVEN: How many promotions were rejected or required amending due to feedback through the CAP process?

The Hon. D.W. RIDGWAY: We do not actually record that; in fact, I am advised that there were none.

The Hon. C.M. SCRIVEN: How many promotions have been rejected or required amending due to feedback from GCAC?

The Hon. D.W. RIDGWAY: That is not part of this. It was only in place from 1 July, and we are looking at the Auditor-General's Report until 30 June, so I do not think it is an appropriate question.

The Hon. C.M. SCRIVEN: You do not want to answer it?

The Hon. D.W. RIDGWAY: It is not part of the scope.

The Hon. C.M. SCRIVEN: As a rule, do you as minister, minister Ridgway, note promotions before they are sent for approval in either the previous process or the current one?

The Hon. D.W. RIDGWAY: I thank the member. I do not have any really formal process. We are briefed on what the themes of the promotions might be, but the final approval process is absolutely with GCAC, or CAP prior to that.

The Hon. C.M. SCRIVEN: On page 385, cuts to industry assistance, the Auditor noted that expenses are reduced due to cuts to 'payments to promote tourist access to South Australia and reduced event sponsorship expense'. Can you itemise exactly what has been cut?

The Hon. D.W. RIDGWAY: There are a number of factors. Additional state government funding was allocated to sponsorship for events such as the 2020 NRL State of Origin and the 2020 Hancock Prospecting Australian Swimming Championships, which this coming year will be the Olympic qualifiers. There was also the transfer of the Adelaide Convention Bureau's administrative funding to the Department for Trade, Tourism and Investment as per the Joyce review, and the retention of the convention bid fund to stage the World Routes conference in 2019 as well. The decrease in expenditure was also associated with a grant to Flinders Ports as a contribution towards the upgrade of the Port Adelaide Passenger Terminal and the implementations of savings and other minor variations.

The Hon. C.M. SCRIVEN: For further clarification—I was finding it a little hard to hear the minister—the question was about what specifically had been cut. Is that what he was answering?

The Hon. D.W. RIDGWAY: Can the honourable member provide the reference point in the Auditor-General's Report?

The Hon. C.M. SCRIVEN: It is page 385, cuts to industry assistance.

The Hon. D.W. RIDGWAY: I have the information. An increase in industry assistance, which is up to $6.2 million, includes event sponsorship and tourism development grants, such as: a transfer of the convention bid fund, as I said in my previous answer, to the Adelaide Convention Bureau; funding to the Department for Trade, Tourism and Investment; contractual arrangements with providers of transport access to South Australia of $1.5 million; a net reduction in event sponsorship of $2.2 million; and a decrease—

The Hon. C.M. SCRIVEN: Point of clarification: that is particularly what I quoted—the reduction in event sponsorship. I am asking: what has specifically been cut in event sponsorship?

The Hon. D.W. RIDGWAY: I think it is actually in the Auditor-General's Report. SATC—reduced payments to promote tourist access to South Australia and reduced event sponsorship. In 2018, the SATC sponsored the FIM Asia Road Racing Championship at Tailem Bend Motorsport Park as an event. If the member likes, and if that is not enough information for her, in the interest of continuing on with the examination of the report, I will take that component of her question on notice and provide her with a more detailed answer.

The Hon. C.M. SCRIVEN: Thank you. Minister, is that one item you mentioned the sole item? If not, if you can itemise the others on notice. I think you also mentioned reductions in transport access. Can you explain what that means?

The Hon. D.W. RIDGWAY: That relates to the arrangement with China Southern Airlines. Unfortunately, for the honourable member's benefit, all of the arrangements with China Southern Airlines are commercial-in-confidence so I cannot disclose the actual details, but that is related to that reduction in transport services. That reduction is because of the arrangement we have with China Southern.

The Hon. C.M. SCRIVEN: Is the minister saying that everything to do with the reduction in transport access is commercial-in-confidence?

The Hon. D.W. RIDGWAY: What I am saying is that that particular item in this year's Auditor-General's Report is solely in relation to our arrangement with China Southern Airlines, and the relationship and contractual arrangement with China Southern are commercial-in-confidence.

The Hon. C.M. SCRIVEN: Does that prevent the minister from advising the chamber about the nature of the access is that is being cut?

The Hon. D.W. RIDGWAY: It is actually not access that is being cut. When a government enters into an arrangement with an airline, there is a range of payments and contractual arrangements. Obviously, one of those was completed and fell due and so we are no longer required to pay it. That is why it is a cut. It is actually not a cut in services; it is one of the components of the contractual arrangements between China Southern and the South Australian government.

The Hon. C.M. SCRIVEN: I refer to page 383, in terms of the Superloop being an significant event. Has the government commenced negotiations on securing a new contract with Supercars Australia?

The Hon. D.W. RIDGWAY: I thank the honourable member for her question. The state government is committed to hosting the Superloop Adelaide 500 on the streets of Adelaide as a city-based circuit through 2021 and beyond. The SATC has an agreement with Supercars that ensures the Superloop Adelaide 500 is the first race of the season through to 2021. If there is a change to the overall calendar, SATC would work with Supercars to obtain the best results for our state.

There has previously been speculation around the potential to move the Superloop Adelaide 500 to Tailem Bend; the government does not support this. The Superloop Adelaide 500 and Supercar race at Tailem Bend (previously known as the OTR supersprint, and will be named 'The Bend OTR 500' in 2020) are very different offerings, and they are positioned in a way that is complementary to each other to gain the best economic benefits for South Australia. The SATC has begun discussions with Supercars about a new sanction agreement beyond 2021.

The Hon. C.M. SCRIVEN: When are those discussions likely to result in a new agreement? What time line can we expect?

The Hon. D.W. RIDGWAY: Sometime between now and 2021.

The Hon. C.M. SCRIVEN: Just on that last question, can the minister be any more specific than, 'Sometime between now and 2021'?

The Hon. D.W. RIDGWAY: For the honourable member's benefit, they are discussions that are held between SATC, Events SA and Supercars Australia, so I am not privy to those discussions. I know they have begun. I know that for all South Australians and the team at the SATC, the sooner we can arrive at a new arrangement the better it will be—we can plan for the future—but right now I do not have any time line. I can assure the chamber that the team at SATC and Events SA will be working particularly hard to come up with a resolution to that because it is Australia's largest domestic ticket motorsport event and something that we should be very proud of, and we are all working to retain it.

The CHAIR: We now move to the Minister for Human Services.

The Hon. C.M. SCRIVEN: My questions to the minister are referencing Part A, page 31. What is the current estimate of the 2019-20 operating deficit, and what are the main causes of that deficit?

The Hon. J.M.A. LENSINK: Perhaps if I could just clarify with the member that we are examining the 2018-19 Auditor-General Report, not the 2019-20 budget?

The Hon. C.M. SCRIVEN: I thank you for the correction; I think I have simply misquoted the number. It is the operating deficit mentioned on page 31 of Part A.

The Hon. J.M.A. LENSINK: The advice I have received is that the agency is just going through the Mid-Year Budget Review process, so we are happy to take that one on notice.

The Hon. C.M. SCRIVEN: This is in regard to the Auditor-General's Report which is referring to items presumably not to do with the upcoming Mid-Year Budget Review, so I cannot understand why the minister cannot answer that in regard to the Auditor-General's Report.

The Hon. J.M.A. LENSINK: Can you clarify which page reference you are looking at because we have agency reports for the South Australian Housing Trust that do not match that?

The Hon. C.M. SCRIVEN: Part A of the Auditor-General's Report, page 31.

The Hon. J.M.A. LENSINK: We have just got the agency reports before us. That starts on page 362.

The Hon. C.M. SCRIVEN: Yes, but we are looking at the entire Auditor-General's Report, and as they relate in this case to the operating deficits. It has been offered, minister, that someone could send you a screenshot, if you would like, if that would be helpful.

The Hon. J.M.A. LENSINK: No, we have found the reference. I am advised that these are accounting measures. The agency itself is in no worse off position. If the honourable member would like an exact figure, we will need to take that on notice.

The Hon. C.M. SCRIVEN: So we will not get questions in the Auditor-General's examination. Can the minister at least advise how this deficit compares to the previous financial year—not with a figure, if that is too difficult, but just a comparison?

The Hon. J.M.A. LENSINK: I will get some response to you, but I think the honourable member, rather than getting agitated about it, is comparing apples with oranges from the previous budget. The way that the authority has been funded has been through a significant grant, so it is very much an accounting treatment. The agency is no worse off.

The Hon. C.M. SCRIVEN: Can the minister explain then why a large annual operating deficit is expected—an explanation for the benefit of the chamber?

The Hon. J.M.A. LENSINK: If I can just try to explain the change in the funding arrangements, the financial statements in the comparability to previous periods have been significantly impacted by the revised funding arrangements of the South Australian Housing Trust. Under the revised arrangements, the South Australian Housing Trust received a one-off grant payment of $602 million in 2018-19, which is an up-front payment of grants previously budgeted to be received over the four-year period 2019-20 to 2022-23.

This one-off grant payment was in addition to the trust's normal grant payments expected to be received in 2018-19, which included an increase as a result of homelessness grant funding. The South Australian Housing Trust will also receive additional equity injections totalling $815 million from 2018-19 to 2022-23, reflecting the South Australian Housing Authority's budgeted capital program as well as funding requirements to support its viability.

These payments will replace grants included in national housing and homelessness agreement grants previously budgeted to be received over the four-year period 2019-20 to 2022-23. As a result of these changes, the trust will receive minimal grant revenue from 2019-20, resulting in large annual operating deficits over the forward estimates. It is the up-front payment that looks different to previous budgets.

The Hon. C.M. SCRIVEN: To clarify, the deficit will not be rectified in any of the next three financial years; is that correct?

The Hon. J.M.A. LENSINK: There is no need to rectify, if I can use the honourable member's word, because the up-front payments mean that the trust is not in any way in any worse a cash position over the forward estimates.

The Hon. C.M. SCRIVEN: Will all of those cash injections be spent on the building program? Is that the minister's response?

The Hon. J.M.A. LENSINK: The funding goes to all sorts of operations. It is capital, it is tenancy, it is operations, it is staff, it is all of the general operations of the Housing Authority that people would be familiar with.

The Hon. C.M. SCRIVEN: Is the minister saying that the deficit, although she does not like to use the term, will not have any impact on the Housing Trust's ability to deliver on its programs? Is that correct?

The Hon. J.M.A. LENSINK: Correct.

The Hon. C.M. SCRIVEN: Referring now to Part B, page 366, why has the South Australian Housing Trust not yet completed its assessment of the condition of its housing stock, and how much progress has been made towards completion?

The Hon. J.M.A. LENSINK: Just in relation to the asset inspection program it is worth remembering that it was the Auditor-General who brought to the attention of the community that the South Australian Housing Trust assets had not actually been audited since 2003. It was an election commitment of this government to undertake that audit process, which they started straightaway. We have some 34,000 properties in South Australia. In regard to the program, so far 21,000 social housing properties have been inspected, and the program of inspections is on schedule. The data is going to assist the authority to better understand basically what needs to be done to each of those properties and prioritise maintenance.

The Hon. C.M. SCRIVEN: My understanding is that the assessment began in February 2018 under the previous government.

The Hon. J.M.A. LENSINK: No.

The Hon. C.M. SCRIVEN: That is the information that I have. Could you tell me when it will be complete?

The Hon. J.M.A. LENSINK: The program certainly did not start under the previous government. It started after the election, and it is on schedule at the moment—34,000 properties, as the honourable member would appreciate, is a significant number to undertake site by site. We anticipate that it will be completed in 2020.

The Hon. C.M. SCRIVEN: Is that the financial year 2019-20 or the end of the calendar year?

The Hon. J.M.A. LENSINK: We anticipate that it will be closer to the end of the calendar year.

The Hon. C.M. SCRIVEN: I might also just direct the minister to—it is in the report that the program started in February 2018. Have any Housing Trust tenants made complaints following an asset check of their home?

The Hon. J.M.A. LENSINK: Is the honourable member referring to the inspection process itself or other annual checks, or what is she referring to specifically?

The Hon. C.M. SCRIVEN: I am referring to the assessment of the condition of the housing stock—continuing the same line of questioning.

The Hon. J.M.A. LENSINK: My understanding—and I do receive some via my office—is that some tenants do express concern because they are not sure why the authority is conducting a check. From memory I think one constituent letter came where the tenant was concerned that it was going to pre-empt the sale of their property, so we reassured that tenant that it was actually just to make sure that we knew what the condition of the property was rather than for that particular purpose. So we do get queries as to why it is happening.

Of course, there should be annual inspections of people's properties, which is more like a landlord's inspection, if you like. This is a specific asset inspection, so some people might find it a little bit more intrusive than what they are used to. I am aware from some of the correspondence that I have received that some people have expressed some concerns, but we have tried to allay them—that it is because it is in the best interests of ensuring that we have a safe and viable property for them to live in.

The Hon. C.M. SCRIVEN: Some of what the minister replied I could not quite hear a little earlier; did she tell me how many individual homes have been checked under the program? That is what I could not quite hear.

The Hon. J.M.A. LENSINK: It is over 21,000 so far.

The Hon. C.M. SCRIVEN: Page 373: if the Housing Trust has not yet completed its assessment of its housing stock, how is it able to work on the Renewing our Streets and Suburbs initiative with the goal of completing it next year, and what is the expected end date of the program?

The Hon. J.M.A. LENSINK: The honourable member may or may not be aware that the Renewing our Streets and Suburbs program commenced several years ago. It was December 2015, and I think it may well have been a Mid-Year Budget Review initiative, so that obviously predates when the asset inspection process took place. The Housing Trust does have some information about what the condition of its properties has been, but obviously the process it is undertaking will be much more complete and therefore, into the future, will provide a better prioritisation of what maintenance, refurbishment, etc., should take place. It has had some of that information in the past and can probably make some estimates also, based on the age of the property.

The CHAIR: I call on the Minister for Health and Wellbeing.

The Hon. C.M. SCRIVEN: I reference Part A: Executive Summary, 4.1.4, 'Reported reasons for the Central Adelaide Local Health Network Incorporated net result'. The Auditor-General notes that KordaMentha's initial contract term ended on Tuesday. Can the minister confirm the total contract length and value of the contract extension that KordaMentha is currently operating under?

The Hon. S.G. WADE: I am advised that it is a two-month extension at a value of $3.6 million. We will confirm those facts and if the information I have just provided to you is not accurate, we will provide it to you.

The Hon. C.M. SCRIVEN: When will that be, if it needs to occur?

The Hon. S.G. WADE: I am happy to undertake to check it overnight.

The Hon. C.M. SCRIVEN: The Auditor-General further notes KordaMentha's KPI has included a $30 million savings target between July and November. Did KordaMentha meet that KPI?

The Hon. S.G. WADE: KordaMentha, as part of the contract, must achieve agreed outcomes. The overarching themes for the recovery plan key performance indicators are service delivery and efficiency; people, culture and governance; information, evidence and insights; finance, cost and revenue management. I understand that KordaMentha has so far saved more than $100 million of taxpayers' money; $57 million improvement against the forecast operating deficit at the end of June 2019 and a further $48 million of benefits from improved controls and strategies. As I said, there are four themes for the KPIs. Of course, the KPIs are listed in detail within the contract, which is publicly available. But in terms of the detail, I will take the honourable member's question on notice.

The Hon. C.M. SCRIVEN: The Auditor-General notes PKF was reviewing KordaMentha's performance against the contract and, at the time of writing, PKF's findings were being reviewed by the government. Will the government publicly release PKF's findings?

The Hon. S.G. WADE: I am certainly not aware as to whether or not it is intended that that report be made public. I will take that on notice and bring back an answer for the honourable member.

The Hon. C.M. SCRIVEN: Did PKF conclude that KordaMentha was providing value for money?

The Hon. S.G. WADE: I am advised that in broad terms the PKF report found that KordaMentha was delivering value for money and also identified further work in terms of the future rollout of the recovery plan.

The Hon. C.M. SCRIVEN: The minister went into the various KPIs a little earlier, so without repeating that can he advise: did PKF conclude that KordaMentha met all of its KPIs and, if not, which KPIs did KordaMentha fail to meet?

The Hon. S.G. WADE: I certainly do not have that detail. I am happy to seek it.

The Hon. C.M. SCRIVEN: When will that detail be brought back to the chamber?

The Hon. S.G. WADE: In due course.

The Hon. C.M. SCRIVEN: Can the minister be more specific than 'in due course'? Is this something he thinks is valuable for the benefit of the chamber or something that needs to be kept secret? It is simply about KPIs and which ones were not met, if indeed any were not.

The Hon. S.G. WADE: I will certainly need to seek advice on the status of the document. In terms of KPIs, I think it is important to stress to the house that there have been clear improvements under KordaMentha's engagement with CALHN. For example, in October 2019, CALHN's average overnight length of stay was 5.3 days, which was 5.3 per cent lower than the same period last year, and agency use remains low and was 61 per cent lower in October 2019 compared to the same period last year.

The Hon. C.M. SCRIVEN: Has the minister seen the PKF report?

The Hon. S.G. WADE: I do not recall having seen it.

The Hon. C.M. SCRIVEN: So does the minister not know what recommendations PKF made on areas of improvement for KordaMentha?

The Hon. S.G. WADE: For the benefit of the honourable member, the PKF report, as I understand it, was not prepared for me, it was prepared for the reference committee or the steering committee. It was for their consideration in the tasks that they have.

The Hon. C.M. SCRIVEN: The Auditor-General reported, at the time of writing his report, that PKF's findings were being reviewed by the government. Is the minister saying that he does not consider it part of his business to know whether KordaMentha is meeting its KPIs, whether KordaMentha has improvements to make, and that that is none of his concern?

The Hon. S.G. WADE: I am acutely interested in the recovery in the central hospitals, governed by the Central Adelaide Local Health Network. This government is encouraged by some of the early advice in terms of what has been achieved not only by the KordaMentha team but in partnership with Lesley Dwyer, the CEO, and the new board. I regularly receive briefings. The processes are thorough. That is why PKF was commissioned to provide advice to the government. In terms of the Auditor-General's use of the term 'government', I am certainly humble enough to know that I am just one member of a 40,000-strong SA Health team.

The Hon. C.M. SCRIVEN: If the minister regularly receives briefings, why is it that he cannot recall what areas KordaMentha needs to improve in?

The Hon. S.G. WADE: I have nothing to add.

The CHAIR: The Hon. Ms Scriven, do you have any more questions?

The Hon. C.M. SCRIVEN: Yes, I do. Perhaps there might be some that the minister can answer. I refer to Part C, page 153, 'Financial recovery program'. The Auditor-General notes that under the first term contract SA Health had to notify KordaMentha by 25 August 2019 if it wished to extend their contract, and this had not occurred at the time of writing. What was the reason for the delay?

The Hon. S.G. WADE: I am not aware of any specific reason, but I will seek advice and provide it to the council.

The Hon. C.M. SCRIVEN: I reference Part A: Executive Summary, 4.3, 'Procurement of KordaMentha services by the Department for Health and Wellbeing'. Does the minister disagree with the Auditor-General's analysis of the KordaMentha procurement, that it was risky and should have been better managed?

The Hon. S.G. WADE: I have immense respect for the Auditor-General's expertise and advice, and I accept his observation.

The Hon. C.M. SCRIVEN: So it was risky and should have been better managed. Why did the government then extend the KordaMentha contract rather than going out to tender, given the significant concerns raised by the Auditor-General regarding the direct negotiation process for the first term?

The Hon. S.G. WADE: I am confident that all appropriate procurement processes are being engaged in in the next steps forward.

The Hon. C.M. SCRIVEN: Why has the KordaMentha contract only been extended for three months? Have the contract specifications or KPIs changed and have the savings targets been revised in any way?

The Hon. S.G. WADE: My understanding is that the extension has been for a short time so that further consideration can be given to the next steps and KordaMentha's role in that. I draw the Chair's attention to the fact that time has expired.

The CHAIR: In terms of time, I already ruled on that earlier today. I am taking into account some of the delays with previous ministers.

The Hon. C.M. SCRIVEN: Can the minister answer the second part of the question and the third: have the contract specifications or KPIs changed and have the savings targets been revised in any way?

The Hon. S.G. WADE: I am happy to take that on notice.

The CHAIR: One more question, the Hon. Ms Scriven.

The Hon. C.M. SCRIVEN: I appreciate your indulgence, Mr Chairman, given we have virtually had no answers whatsoever. Who made the decision not to go out to tender for this phase of the CALHN plan, and was the decision put before cabinet?

The Hon. S.G. WADE: I am happy to take that question on notice.

The CHAIR: Honourable members, the committee has considered the Auditor-General's Report.