Emerging Industries

The Hon. J.A. DARLEY (17:05): I move:

That this council—

1. Expresses its lack of confidence in the Minister for Trade and Investment and the government’s economic development credentials and commitment to support emerging industries;

2. Condemns the lack of assessment and support for ACE EV Group and notes its probable loss for South Australia; and

3. Demands the government undertake rigorous assessment of the opportunities provided by newly emerging industry sectors and related specific high-value employment enterprises and develop appropriate support plans.

In December last year, I requested a copy of any documents from Renewal SA, Department of the Premier and Cabinet and the Department for Trade and Investment relating to the assessment of the merit or otherwise for the South Australian government to provide support to ACE Electric Vehicle (EV) Group's location in South Australia. This is to include:

1. Assessment of ACE EV Group's importance to South Australia's economic development priorities;

2. Assessment of ACE EV Group's business plan and model and investor commitment that would ensure the success of the project in South Australia; and

3. Assessment of the level of support the government should provide to ACE EV Group based on the assistance the company has requested.

I have received replies to my FOI requests. The Department of the Premier and Cabinet advised:

[that they do] not hold any documents in relation to your request. It is likely documents would be held by the Department of Trade and Industry (DTI).

Renewal SA advised:

…their role with ACE EV has been solely related to assisting to source a suitable property for their proposed business. Renewal SA's role does not extend to the assessment of the value of the proposal to the State's economic priorities, or assessment of the ACE EV business plan or investor strength. I understand that the documents you are seeking relate to the ACE EV business investment itself. I am advised that these documents are more related to the functions of the Department for Trade and Investment (DTI).

DTI decided to rewrite the FOI request to them, perhaps to avoid providing any documents, namely:

Documents relating to the assessment of ACE EV Group's importance to SA's economic development priorities; and assessment of ACE EV Group's business plan and model and investor commitment that would ensure the success of the project in South Australia; and assessment of the level of support the government should provide to ACE EV Group based on the assistance the company has requested. A search for documents held by DTI was conducted and I have determined that no documents were identified as meeting the scope of your request. I can confirm that the Department has been working with ACE Electric Vehicle Group on its consideration of South Australia as an investment location, however, there are no documents to make an assessment on its business case.

One would wonder how the department could work with ACE Electric Vehicle Group on its consideration of South Australia as an investment location without doing an 'assessment of the merit or otherwise for the South Australian Government to provide support for ACE Electric Vehicle Group's location in South Australia'. However, I am going to take this reply from DTI at face value and assume that the department worked with a company under the knowledge and direction of the Minister for Trade and Investment without undertaking an assessment on its bona fides and level of importance.

I will now recount my involvement with the company ACE EV and the government, where I repeatedly questioned the government's actions or lack thereof. I wrote to the Minister for Trade and Investment on 27 September last year and advised, and I quote:

My office was contacted by Mr Greg McGarvie, Managing Director of ACE Electric Vehicle Group, on 20 August 2021. Mr McGarvie provided his opinions and advice on policies relating to road user charging for Electric Vehicles. In the course of that conversation, my staff raised the possibility of his company setting up in South Australia. My policy advisor was told there had been past conversations with the SA Government but that 'things have gone quiet' and positive developments had proceeded in other States. Accordingly, I contacted Minister Pisoni and yourself on Monday 24th August to see if the enterprise had been investigated and there was no interest for South Australia.

My policy advisor contacted Mr McGarvie late last week to check on the outcome and he advised that he had still not had any contact from the SA Government. My policy advisor contacted your Office late last week and wanted to find out what had happened. He was advised a letter had been prepared and asked for an indication of the action being proposed but did not receive any further contact from your Office. If there are economic or financial reasons for SA not pursuing any offering from ACE Electric Vehicle Group, I would be interested in obtaining this information. It would be very disturbing, if there is benefit for SA, but the matter had not been pursued.

On 1 October, the minister sent me a copy of a letter he wrote to ACE EV, advising:

I was pleased when ACE Electric Vehicle Group received $5 million from the Federal Government to develop a bi-directional vehicle-to-grid (V2G) trial. I was delighted to learn of the recent launch of the X1 Transformer modular platform of electric light commercial vehicles and the progress of the ACE Electric Vehicle Group's plans to commence their assembly in the first half of 2022. I encourage you to follow up with Renewal SA and, in the meantime, the Department for Trade and Investment will continue to connect ACE Electric Vehicle Group with various channels for South Australia Government support, including local supply chain services, Immigration SA, investment facilitation, and training and skilling services.

I encourage you to provide updates on ACE Electric Vehicle Group's plans as you progress discussions with Renewal SA and other relevant developments.

It is surprising that this information would be received by the department without, as indicated in my FOI, and I quote:

…assessment of the merit or otherwise for the South Australian Government to provide support to ACE Electric Vehicle Group's location in South Australia.

On 7 October, I wrote to the Treasurer:

I spoke to Rex Patrick this morning. Independently, he has written to the Premier and is awaiting a reply. He indicated that he obtained $5 million for ACE EV for South Australia and indicates a 1000 jobs are involved! He is very unhappy and will not wait long for a reply from the Premier before going public on the matter.

I also need a speedy response. My advisor has followed up with Renewal SA and is not convinced much priority or understanding has been inserted into the process between Trade and Industry and Renewal SA. ACE EV needs to receive an unambiguous message that SA is very interested and not the converse.

A letter was sent from my office the next day to the Treasurer's Chief of Staff pointing out the following points:

I am concerned that this matter is not being taken very seriously.

I understand that $5 million was secured by Senator Patrick for SA for the ACE EV project to develop mobile energy management technology (a global first) plus develop EV manufacturing and the intention was that this would be a development opportunity for SA.

Senator Patrick has recently written to the Premier about the matter. Our office had become aware of the matter since August 20^th and has tried to understand what is happening; hence our correspondence to Minister Patterson (see attachments.) I don't know the SA government's assessment of the proposed enterprise or its priority but I do know the Queensland Government has shown considerable interest and negotiations are well advanced.

What may in the past have been an easy exercise of SA securing this project is now more complex. Whilst not receiving feedback from SA, this time has allowed ACE EV group to secure interest from other states impacting the Group's previously interest in SA.

I am preparing a MOI for John Darley for next Wednesday and would like to include the actions of Government on this matter. Managers in Renewal SA and DTI have been informed to engage with ACE EV Group to identify land which I understand was the outcome of our enquiry to Minister Patterson's Office.

The government needs to be clear in their position on ACE EV Group (interested or not), and have head of agencies speak with Managing Director Greg McGarvie directly on his company's requirements, and what might be met by SA Government, and therefore whether SA is interested in following up.

I received no further advice on the subject and developed a matter of interest the following week. The pertinent points from that matter of interest on 11 October were as follows:

I rise to speak about the possibility of EV production returning vehicle manufacturing to South Australia.

Senator Rex Patrick's strong advocacy was instrumental in ACE Electric Vehicles Group securing a $5 million grant in the 2020-21 Federal Budget for

1. a South Australian Advanced Manufacturing Facility to facilitate the manufacturing and assembly of electric vehicles, and

2. a bi-directional vehicle-to-grid trial to examine the concept and operation of systems which support solar home charging, grid services and virtual storage infrastructure.

I understand that Stage 1 of ACE EV Group project planning is underway with this $5 million grant. The bi-directional vehicle-to-grid will not only support energy trading opportunities that lower home energy costs and vehicle running costs, but the virtual power plants and the multi-use of the EV batteries can contribute to grid resilience, home energy security during blackouts, and Mobile Energy Management as a direct power source for tools and other off-grid applications.

South Australia is in the box position, because of the high level of roof-top solar and renewables, to do the forward supportive thinking for Grid management, when it comes to encouraging EVs as virtual power plants, and indeed the use of these economics, to encourage transition to EVs. Just as easily, lazy grid management strategy could be rolled-out that disincentivises the concept of local virtual power plants by not rewarding their use.

The ACE EV Group particularly point to the importance of mobility electrification and mobile energy noting that it will be transformative in our society, spawning new industries, and drawing an analogy with mobile phones.

The next stages planned by ACE EV Group is the location of their Head Office and locating and establishing a manufacturing hub. The ACE EV Group indicate the benefits from their forward plans to be in the order of 1,400 jobs by 2025 with a further 12,000 indirect jobs, generating $1.37 billion revenue. Overseas partners of ACE EV have already built two plants so the Australian plant would be the third. The manufacturing process uses moulds, plastic, carbon fibre and gluing.

These are very substantive claims and benefits for South Australia being made by the company, so I concluded my MOI by stating, and I quote:

I am not in a position to check and evaluate the veracity of the ACE EV Group project claims but the Company has obtained funding from the Federal Government. I am concerned about the extent to which the SA Government has determined its position and assisted the company over the last several months. I have been in contact with the company since the 20^th August, asked questions of several Ministers, and tried to find out what the Government is doing. I am concerned that there has been uncoordinated and inconsistent follow-up that will result in a potential project of real significance being lost to South Australia.

I have a copy of correspondence sent by ACE EV to DTI and DPC in January 2021 pointing to the substantial benefits for South Australia of $1.37 billion in revenue, 1,400 jobs and a further 12,000 indirect jobs, and an export industry—and then, in the words of the company, things went quiet. Documents were provided. Yet, to repeat, I have discovered from an FOI that there is no record of 'assessment of the merit or otherwise for the South Australian Government to provide support for ACE Electric Vehicle Group's location in South Australia'.

ACE EV, at the Electric Dreams Expo showgrounds in Brisbane, are launching their product, and any opportunity for South Australia to be at the centre of their activities is all but finished. It has been put to me by a minister that the government does not pick winners, but are they doing enough in the area of newly emerging industries associated with electric vehicles given their woeful dealings with ACE EV?

Will the government apologise to South Australians if this company is a success elsewhere because it did not assess the merit or otherwise of providing support for this company? May I suggest there are important economic development issues to be explored by a select committee to be established next year on EV vehicles. I call on this chamber to consider the track record of the government and ask that this chamber:

1. Expresses its lack of confidence in the Minister for Trade and Investment and the government's economic development credentials and commitment to support emerging industries.

2. Condemns the lack of assessment and support for ACE EV Group and notes its probable loss for South Australia.

3. Demands the government undertake rigorous assessment of the opportunities provided by newly emerging industry sectors and related specific high-value employment enterprises, and develop appropriate support plans.

Debate adjourned on motion of Hon. N.J. Centofanti.