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House of Assembly - Fifty-First Parliament, Second Session (51-2)
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Auditor-General's Report

AUDITOR-GENERAL'S REPORT

The Hon. J.M. RANKINE (Wright—Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Volunteers, Minister for Consumer Affairs, Minister Assisting in Early Childhood Development) (15:57): I move:

That standing orders be and remain so far suspended as to enable the report of the Auditor-General for the year ended 30 June 2007 to be referred to a committee of the whole house and for ministers to be examined on the matters contained in the report in accordance with the timetable as distributed.

The SPEAKER: There not being an absolute majority of members present, ring the bells.

An absolute majority of the whole number of members being present:

Motion carried.

In committee.

The CHAIR: If I can just remind everybody that it is the same procedure, with the committee of the whole, in respect of the courtesies that normally occur. I will be generous with my interpretation of three questions per member. So I call now the Minister for the River Murray, Minister for Water Security, Minister for Regional Development and Minister Assisting the Minister for Industry and Trade. We will consider these matters for 30 minutes.

Mr WILLIAMS: I refer to page 1269 of the Auditor-General's Report. The Auditor-General noted that the government fulfils a number of roles with regard to SA Water, including price setter, taxer, banker, shareholder and owner, and regulator. Does the minister not see a conflict between these various roles? How can the South Australian public and SA Water customers be confident that the primary role of SA Water remains that of service provider?

The Hon. K.A. MAYWALD: The Auditor-General did make those comments. I remind the member that SA Water was established under the former Liberal government, and I have every confidence in SA Water's undertaking its roles.

Mr WILLIAMS: I refer to page 1269 of the Auditor-General's Report. Given that Treasury must sign off on SA Water's annual performance statement, which sets out targets for after tax profit and return on capital, and that Treasury is also reliant on significant dividends from SA Water, which are set at 95 per cent of after tax profit, what are the chief drivers within SA Water management?

The Hon. K.A. MAYWALD: SA Water's management is, of course, driven by its charter, government policy of the day and the shareholder and, indeed, the people of South Australia are major shareholders in the organisation.

Mr WILLIAMS: I think the point that the Auditor-General made, and the point that I am making, which I would like the minister to address, is this. Given the imperative of SA Water to produce such returns to the Consolidated Account (and the chief role of SA Water is to provide cost efficient water supply and delivery service to South Australians, both domestic and industrial users), how does the minister ensure that there is control to make sure that the service delivery component remains at the forefront? I have just pointed out that the Auditor-General listed all the roles that the government has with respect to SA Water, and that Treasury has such an important role in negotiating with SA Water, basically, what its after tax profit is, in which Treasury has a 95 per cent interest.

The Hon. K.A. MAYWALD: The SA Water charter sets out quite clearly the roles and responsibilities of the board of SA Water and the management of the business. The Minister for Water Security and the Treasurer are the shareholders and the point of contact between the SA Water board and the government. We work very closely together and we ensure that the charter is adhered to, and the performance statement is the way in which we gauge whether or not SA Water is meeting its obligations.

Mr WILLIAMS: On page 1270, the Auditor-General again raised the issue of SA Water's being required to borrow against its assets to provide for the level of dividends and return on capital required by Treasury. I note that this is certainly not the first time that the Auditor has raised this issue. From memory, he said that, in the last four years at least, SA Water has been under similar pressures. Does the minister believe that it is sustainable for SA Water to continue to have to borrow against its asset base to provide these funds to Treasury? In particular, does she believe that it is sustainable, in view of the desperate need for investment in water infrastructure in South Australia, and how is it envisaged that such infrastructure will be funded?

The Hon. K.A. MAYWALD: The member would know that, when one is embarking upon a very large capital works program (or, indeed, any capital works program), the realisation of those assets for community use is sometimes quite extended and down the track. The government has set a borrowing target for the corporation with a debt to asset (or gearing) ratio ranging from 15 to 25 per cent, which is modest in itself. Overall, the corporation's actual results in the forward budget estimates from 2007-08 to 2010-11 show that the current debt to asset ratio of about 18 to 19 per cent will be maintained. That is also acknowledged by the Auditor-General.

Mr WILLIAMS: I refer to page 1268 of the Auditor-General's Report. Given the myriad controls that the government has over SA Water, to which I have been alluding, is it not true that the Treasurer simply sees the organisation as a cash cow to underpin his budgets? For example, dividends appear to be simply stripping cash against the revaluation of SA Water's assets. This year, the revaluation amounted to $664 million.

In answer to the previous question, the minister acknowledged that one of the targets is to maintain a debt to asset ratio of between, I think, 15 and 25 per cent. In the last 12 months, we have seen the assets of SA Water increase in value by $664 million. I think the average debt to asset ratio has been hovering at just under 20 per cent; at 17 or 18 per cent. If one takes 17 or 18 per cent of $664 million, it is a fair bit of cash that all of a sudden, under the government's set of guidelines, it can strip out of SA Water to prop up the budget.

The CHAIR: As I best recall the question, the first part was: isn't it true that the Treasurer views...? The minister cannot answer in relation to the Treasurer's view but she may be able to provide information.

Mr WILLIAMS: On that point, Madam Chair, I was under the opinion that every minister speaks for the government, and the opposition is often told in question time that any minister, irrespective of who the question is directed to, can speak for the government. I would expect that the minister (certainly as the minister for SA Water) would be across the issue that I have questioned.

The CHAIR: Member for MacKillop, I indicated that the minister could probably provide some factual answers but she cannot provide an indication of another minister's mind.

The Hon. K.A. MAYWALD: In referring to the part of the question regarding the revaluation of assets within SA Water, of course revaluation of assets occurs on an annual basis in line with the increase of replacement costs of assets, plus there is also the adding of new assets into the business. SA Water has an extensive and very large asset base, as you would be aware, investing in things like the improved country water treatment program at the moment with over $50 million being invested out in the regions to provide new filtration plants and a whole range of asset upgrades that SA Water invests in every year. Of course, the revaluation is going to go up as a consequence of that.

Also, when you are talking about borrowing rates for a company the size of SA Water—and, indeed, any kind of borrowing ratio—you actually spread the cost of that asset across the duration of the life of that asset, and that is why borrowings are an important part of the business. SA Water has a very modest target in regard to its debt and asset ratios (as I said, 15 per cent to 25 per cent), currently sitting at about 18 per cent to 19 per cent, which is quite acceptable for an organisation the size of SA Water.

Mr WILLIAMS: The point of the questions I have been asking, minister, is also what the Auditor-General has pointed out on a number of occasions: SA Water is forced to go into the market and borrow against its assets to pay into the consolidated account. Every South Australian knows that there is extreme pressure on SA Water to perform its key role which is to source water and deliver that water to its customers across South Australia.

We continually hear from your government that there are cost pressures—and I will come to that in a moment in further questioning—and difficulties that the government faces in being able to finance the sort of infrastructure that we need to be provided by SA Water. I guess that is why I asked the question earlier. Is it sustainable for Treasury to keep ripping money out of SA Water when SA Water is unable, first, to maintain its existing infrastructure because of cost pressures and, secondly, to build new infrastructure which is patently needed?

The Hon. K.A. MAYWALD: There is certainly no evidence that SA Water is having difficulty maintaining its current assets. As you would be aware from the budget papers, the increase in capital expenditure in SA Water over the past five years has been considerable compared with the asset investment of the previous five years under the Liberal government. Of course, in any business the size of the SA Water Corporation, it is important to have prudent management which includes a sensibly geared debt to asset ratio.

We are investing in major projects such as the Glenelg waste water treatment upgrade and pipeline to the city which will provide for the use of recycled water in parks and gardens around the city. The Christies Beach upgrade will extend significantly the waste water reuse in that area. The extension of the Virginia pipeline is another major project. These are all great projects that SA Water is embarking on well within its capacity under normal prudent business management. As I understand it, the ratio was established back when the corporation was formed under the previous Liberal government, so I cannot see why it is a problem now.

Mr WILLIAMS: That was an interesting comment in the minister's answer. The reality is that those projects you have mentioned, minister, have all been underpinned by funds from the federal government. In fact, that money has been on the table for three years and that is how long it has taken your government to get to the point where it can agree to put in some money of its own. So, that suggests to me that there is either a lack of will to do anything or there are financial pressures which are not allowing your government to match the commonwealth funds to get on with those projects. But I will move on.

Page 1260 of the Auditor-General's Report refers to the key objectives, one of which is to 'provide value for money water services within South Australia.' Minister, can you clear up the confusion over water charges arising from various government statements? First, the former minister, the Hon. Michael Wright, on 8 December (almost 12 months ago) announced price increases of CPI plus 3 per cent for each of the ensuing five years—that is, a total of CPI plus 15 per cent over five years. He stated that 'the increased price will allow the government to significantly invest in the future of our state’s water supplies.'

Then the Treasurer around budget time told the house on 28 June, 'We have set a price path—and I do not have the brief in front of me, and I will get a better answer than this—but it is inflation plus 2 or 3 per cent, which gives us the capacity to service more capital than is needed to waterproof Adelaide. If we do a desal plant or a build of Mount Bold, we would then have to lift that even higher'.

Minister, you were quoted in The Advertiser of 13 September as saying, 'Increased infrastructure will lead to increased prices.' Did minister Wright get it wrong last December or did the Treasurer get it wrong in June or did you get it wrong in September? What is the real situation?

The Hon. K.A. MAYWALD: The only person who has it wrong is the member for MacKillop. Back on 8 December the announcement by minister Wright was an increase of CPI plus 3 per cent. The 3 per cent was to build into the forward estimates the capacity to deliver on projects under the Waterproofing Adelaide strategy—an extensive strategy (developed from 2003 and released in 2005) which had major investment in demand management, stormwater projects, recycled effluent and reuse projects as well as catchment management. From memory, about $240 million in the forward estimates has been allocated towards Waterproofing Adelaide initiatives.

Since 2005, you may recall that we have had the most severe drought on record. It may have escaped your notice but it has actually changed the parameters under which Waterproofing Adelaide was initially established. Waterproofing Adelaide was based on the previous 116 years of data; however, 2006 has been a year that could never have been predicted from looking back through those historic records.

It was 56 per cent of the previous low year, and it has re-established new perimeters. We have immediately gone back to the books to revisit the perimeters of Waterproofing Adelaide and look at what other projects we need to build security into the water supply for Adelaide and South Australia. I can assure you that there is no confusion in this. Waterproofing Adelaide will still continue.

The Waterproofing Adelaide projects are an important component of securing the future of South Australia's water supply. There is no magic silver bullet; however, there will be further investment in infrastructure and further investment in desalination. An expansion of the reservoir capacity in the Mount Lofty Ranges will incur further cost increases in the future as those investments are decided upon.

I can assure you that the Waterproofing Adelaide document, however, does not become redundant. That document is a very important document. It is a very important strategy. It has some terrific targets which will certainly assist in securing Adelaide's and South Australia's water supply in the future. However, with the new perimeters as a consequence of the drought, we have revisited that document. We are looking at other major infrastructure projects and desalination, which the Premier has already announced. Also, the expansion of Mount Bold will of course incur extra costs associated with construction. It is a $2.5 billion investment over and above the Waterproofing Adelaide strategy, so therefore you can see that it does not get pulled out of thin air. The capacity to pay will have to be built into that.

Mr WILLIAMS: Again, another interesting answer. Minister, if you consult the Waterproofing Adelaide strategy and look at the graphs on pages 14 and 15, you will note that back in 2005 the strategy did indeed identify that under drought conditions Adelaide would run out of water about now—2007-08.

The Hon. K.A. Maywald interjecting:

Mr WILLIAMS: Well, I invite you to go back and look at the document, because there are two graphs that show that the supply under drought conditions actually does not meet demand at this point in time, and that was identified several years ago.

The Hon. K.A. Maywald interjecting:

Mr WILLIAMS: Look at the graphs on page 14 and 15 of the Waterproofing Adelaide strategy, minister. It is interesting that you now suggest that Waterproofing Adelaide has been outdated by the drought. On my reading of it, it certainly did identify that there would be a shortage. Maybe your answer has a lot to do with hindsight on your part.

Minister, I now refer you to page 1602 of the Auditor-General's Report regarding South Australia's commitment of 35 gigalitres a year for the Living Murray project by 2009. It is my understanding that about 13 or 14 gigalitres of that water has already been put aside for that purpose. What is the timeframe for achieving the 21 or 22 gigalitre balance for this commitment? Why doesn't your government go into the current market and buy water and make available any allocation on those licences to help protect permanent crops in South Australia?

The Hon. K.A. MAYWALD: As the member should be aware, the Living Murray is water that has to be ring fenced for the environment. Under the rules of the business plan and the details of the Living Murray initiative, that water is only available for the environment. It is to take it out of production capacity and, if it is allocated to the Living Murray, it is not available for other consumptive purposes. That is made very clear in the initiative. It is our intention to achieve our target of 35 gigalitres towards the 500 gigalitres return to the environment by 2009.

Mr WILLIAMS: The very point that I asked about, minister. There is nothing to stop your government—given that it has given a commitment to go into the market and acquire that water, get it from somewhere—from going to the market today to acquire that water and use any portion of it which is allocated today to underpin the saving of permanent plantings in your own electorate and other parts of the Murray system in South Australia in the current irrigation season, and even in the next irrigation season, and then, in 2009, transfer those licences to the Living Murray project. I do not know whether you want to comment on that, minister.

The Hon. K.A. MAYWALD: Quite simply, under the process that is involved in the Living Murray, the purchase of water is an option, but it is an option that has not been preferred by most jurisdictions, except South Australia. We put it up as a proposition. We have indeed acquired 13 gigalitres of water. It currently sits on, I believe, the eligible measures register, and the South Australian government intends to achieve our 22 gigalitres through a range of measures: efficiencies on farm through to wetland management and savings, and also a portion of purchase of the water from willing sellers, of which 13 gigalitres has already been put up to be eligible measures.

As for going into the market and purchasing water at this point in time, the problem with that notion is that only a small portion of those licences are available for use, because the same rules apply for those licences as they do for irrigators. The purchase of permanent water in the marketplace at the moment will deliver only the 16 per cent that is allocated for irrigation. As we have said to the federal government over and over again, we believe it is important to support irrigators to be able to purchase water in the marketplace.

Both the commonwealth and New South Wales, and others, have said that they are not keen on the South Australian government getting involved in the water market directly. They would prefer to see support for irrigators to purchase water. Of course, the responsibility for drought relief lies with the federal government. We have been in touch and we have actually sent our special drought adviser over to Peter McGauran's office. Peter McGauran himself was not available; however, I have had a number of conversations with the federal minister for agriculture and also the minister for water security to try to secure a way in which our irrigators are able to get into the marketplace to purchase water but, at this stage, that particular proposition has not been supported.

However, we would welcome the opposition's support for the proposition that is being put forward by the irrigators to the federal government to enable them to get into the marketplace and purchase water so that they are able to keep their permanent plantings alive.

Mr WILLIAMS: Again, minister, I find your response interesting. What you are saying is that the South Australian government should not go into the market but that we should encourage the federal government to give money to irrigators so that they can go into the market to buy water for exactly the same purpose. The irrigators will buy non-permanent water, whereas the South Australian government already has a commitment on the table to buy permanent water.

Your argument is just a way of saying that the South Australian government will not put any of its money on the table to help support irrigators on the river but that, of course, it is the responsibility of the federal government. I see your argument, minister, but I just think that the irrigators on the river have every right to be very disappointed in a state government that has already made a commitment to purchase this water. However, it will not purchase it now, when it is damn well needed; it will purchase it in two years' time when, hopefully, the drought has broken.

I turn now to page 1602. The Auditor-General talks about the $4.1 million the South Australian government has paid to the Victorian government—again, as part of the Living Murray project. Can the minister confirm that this payment is towards the Goulburn-Murray water recovery package; if so, what is her government's attitude to the Victorian government's plan to build a pipeline over the Great Divide to pipe 75 gigalitres of water per year out of the Murray-Darling Basin to supplement the Melbourne water supply—a project we are funding or helping to fund?

The Hon. K.A. MAYWALD: First, in response to the previous comments on water purchase, I wish to clarify the record. The water purchase for the Living Murray is about environmental water and its permanent allocations. The permanent allocations purchase out of the marketplace of $2,500 a megalitre at the moment to deliver only 16 per cent is a very expensive way to try to get water back into the marketplace.

The irrigators themselves have put forward a proposition to both the federal agriculture minister and the federal government to support longer term loans to enable them to access the marketplace. They believe that an active market is important, and they also believe that the government should stay out of the marketplace because they need to be in there purchasing water for their own benefit.

This government has put in place $70 million worth of support to enhance the federal government's package. The federal government has been providing drought relief, as it is its responsibility for the major role of drought relief across the nation. Billions of dollars have been invested by the federal government through the Exceptional Circumstances program. State governments generally manage fire, flood and other natural disasters, whereas drought is the responsibility of the federal government.

I believe that it is irresponsible for members of this house to try to shift the blame because their colleagues federally are not actually recognising that there is a significant difference in relation to drought in broadacre and drought in irrigation communities. I will continue to support not only irrigators in my electorate but also South Australian irrigators throughout the length and breadth of the River Murray to lobby the federal government to get support in what is a very difficult time.

As to the other question in relation to the Goulburn-Murray investment of $4.1 million in the Victorian Goulburn-Murray package, that is a different project from that being proposed by the Victorian government to pipe water into Melbourne. The South Australian government is not investing in the project to pipe water to Melbourne.

Mr WILLIAMS: But is the $4.1 million being invested in the Goulburn Valley water recovery project—a project that the Victorian government argues is freeing up water, which then allows it to take out 75 gigalitres and pipe it into Melbourne?

The Hon. K.A. MAYWALD: They are two separate projects. The project in which we are investing is not the project that will pipe water down to Melbourne.

Mr WILLIAMS: But is the $4.1 million we are investing, through the Victorian government, into the Goulburn Valley, being spent in the Goulburn-Murray water recovery package?

The Hon. K.A. MAYWALD: No; there are two projects the Victorian government is investing in: one is the Goulburn-Murray water recovery project under the Living Murray; and the other one is called, I understand, the food bowl improvement program, which is a different project and is not one in which we are investing.

Mr WILLIAMS: So, which one are we investing in?

The Hon. K.A. MAYWALD: The South Australian government is investing in the Goulburn-Murray water recovery package, which has been registered under the Living Murray initiative and which is a separate project to what I think is called the food bowl improvement project, or something like that. It is a project that is being invested in and is not one which has been registered with the Living Murray or one in which the South Australian government is investing.

Mr WILLIAMS: Another part of my question was: does the minister have an attitude about the Victorian government's plan to withdraw 75 gigalitres of water per year from the Murray-Darling Basin and pipe it to Melbourne?

The Hon. K.A. MAYWALD: The South Australian government has a very strong view that we need to ensure that all water extractions from the River Murray are sustainable within each jurisdiction, and that is why we have supported in full the federal government's $10 billion plan to deal with overallocation in the Murray-Darling Basin regions. It is very important that any water taken out of the system is fully accounted for. We are not investing in the project to take water through to Melbourne.

Mr PEDERICK: Can the minister explain what the government is doing to ensure full accountability in the Department of Water, Land and Biodiversity Conservation? There are many references in the Auditor-General's Report, from pages 1594 to 1599, that draw attention to inadequate control and accountability across the whole department. For example, on page 1594 it states that the DWLBC 'further acknowledged that it was yet to fully develop certain control frameworks and in some instances had not implemented desired controls or not rigorously applied some existing controls'. Again on page 1594, it states, 'Key payroll controls were not consistently operating as intended.'

On the same page it states that limitations were apparent in DWLBC's system, resulting in interest not being applied to outstanding water levies and penalties as required by the NRM Act 2004. On page 1594 it also states that 'inaccurate water licensing revenue and debtors balances had flowed through to the general ledger without appropriate adjustment'. There are many statements in these pages, but one in particular raises much concern. On page 15.95—budgetary management—the review noted that DWLBC's budget management system incorporated budget expenditure targets which exceeded that approved in the Department of Treasury and Finance's budget system.

The Hon. K.A. MAYWALD: The Auditor-General's opinion on internal controls indicated that, apart from certain matters raised in relation to control environments, specific control matters, the natural resources management fund, and payments from the administrative grants funds, the controls exercised by the department were sufficient to provide reasonable assurance that the financial transactions of the department had been conducted properly and in accordance with the law.

The recommendations made by the Auditor-General refer to leading practice recommendations, which are improvements on systems that will ensure that the department can achieve leading practice processes rather than just the prescribed processes under Treasurer's Instructions. So, this moves beyond that to ensuring and providing recommendations for improvement. The Auditor-General has not said that they were insufficient, just that they could be improved, and that is what the department has taken these recommendations to mean. I have confidence in the department to deliver on improving the processes to ensure that we can adapt to these leading practice recommendations.

The CHAIR: I now call the Attorney-General, Minister for Justice and Minister for Multicultural Affairs to the table.

Mrs REDMOND: The first area that I want to examine—and I want to clarify, first, that it is examinable in this particular section—relates to the Auditor-General's section. I refer to Volume 1, page 243.

The CHAIR: What aspect are you querying?

Mrs REDMOND: I guess I need to explain the question that I want to ask, Madam Chair. If you look at page 243 on the notes to and forming part of the financial statements, the objectives of the department are as follows:

The Department's main statutory responsibilities are to audit the public accounts and the accounts of public authorities and to report the results to parliament...

It goes on to state that within this program class there are two programs: prescribed audits, which includes all audit work to be undertaken for agencies, and special investigations, which is specifically requested to be undertaken by the Auditor-General. My question is about what does not appear in here. I refer to the top of page 240, 'Communication of audit matters'.

Of course, the Auditor-General's office is actually audited by Edwards Marshall because the Auditor-General obviously cannot audit the Auditor-General's office. In its management letter it advised that there were no significant issues arising from the audit. That strikes me as odd, given that we know from estimates—and I cannot tell where it appears in here—that the Auditor-General (not the current one, but the one recently retired) expended $100,000 overnight engaging a firm of lawyers and a series of barristers to take to the Supreme Court an ex parte application in an attempt to prevent the DPP from filing a report with the parliament.

Quite apart from the fact that the application to the Supreme Court was always bound to fail and was a ridiculous waste of money, it seems that, on the basis of the statement that appears on page 243, to which I have referred, the statutory responsibilities are to audit the public accounts and that there are two programs—the standard audit of the department and the things specifically requested.

That expenditure of $100,000 by the Auditor-General does not come clearly within anything that is said on page 243 as to the functions of the Auditor-General's office. My question is: how then can it be that he has expended $100,000 on an absolute waste of taxpayers' money on a wild goose chase in his fight with the DPP, yet the auditors Edwards Marshall say that there are no significant issues arising from the audit?

The CHAIR: Member for Heysen, my question relates to the reason you are bringing it up now. We do not have any information to contradict your bringing it up now, it is simply that in estimates matters relating to the Auditor-General fall within the Premier's area.

Mrs REDMOND: That is why my first question was: am I able to ask that question within this line, as it were, because I cannot see anywhere else that it would come, other than under the Attorney-General for the audit purposes.

The CHAIR: Indeed; we do not have any clear information here. Does the Attorney have an opinion?

The Hon. M.J. ATKINSON: Not really, but I would certainly commend to the Economic and Finance Committee that they have a careful look at the former Auditor-General's Report on how he spent that money and also on the expenditure of money on Ball Public Relations by the Office of the Director of Public Prosecutions. I urge a full examination of that by the Economic and Finance Committee, and I hope the opposition would support that.

The CHAIR: Do you wish to go to other places, member for Heysen?

Mrs REDMOND: Yes, I think it might be easiest to go to other places at this stage. I turn to page 171, which is within the Attorney-General's area. At the very top of the page there is a listing of remuneration of employees. I am seeking an explanation as to how it is that last year we had one employee earning $230,000 to $240,000; for some reason one at $380,000 to $390,000; and one at $390,000 to $400,000, yet this year two of those have gone up to over $400,000 and one to $500,000 to $510,000. I am seeking an explanation as to what has caused such a dramatic increase, given that it appears—and maybe I am misreading it—that last year the highest paid of the employees was sitting under $400,000 but this year it has gone to over $500,000, which represents an increase of 25 per cent in remuneration in the period of one year.

The Hon. M.J. ATKINSON: That is a question I will have to take on notice because, clearly, Mr Pallaras, the DPP, would be within one of those bands, but he does not appear in 2007 and I am not sure why that would not be. My guess is that one of them is the Solicitor-General, Chris Kourakis QC—well worth every dollar he is paid by this government, an outstanding Solicitor-General—I think the other would be Ted Mullighan who has retired from the Supreme Court and who is conducting the inquiry into children in state care, and again I think even the opposition would say that Ted's work is value for money, but we will take it on notice.

Mrs REDMOND: There is a reference somewhere around these couple of pages to judicial officers earning over $100,000. Can the Attorney confirm for me that there would not be any judicial officers earning less than $100,000 in this state.

The Hon. M.J. ATKINSON: Certainly there are judicial officers earning less than $100,000, and they are Her Majesty's special justices who are volunteers who were removed so cruelly from the courts by the Liberal government and who have now been brought back into service. However, regarding stipendiary judicial officers, alas, they do not come under $100,000 any more, and if we appointed any more than we currently have, no doubt the parliamentary Liberal Party would condemn us for appointing fat cats—that is, public sector employees of more than $100,000—although speaking for myself, I would like a few more.

Mrs REDMOND: Perhaps while we are on page 171, I did have a question out of sheer curiosity. About three-quarters of the way down the page under 'Other expenses payable to entities within the South Australian government' there is 'Betting Services.' I am curious about, first, what it is; and, secondly, why it went from 22 last year to six this year?

The Hon. M.J. ATKINSON: That is minister Caica. It is not, as the member for Heysen might have thought, the Attorney-General's tipping service. However, if she had rung me on the morning of the first Tuesday of November, she would have been given one tip and one tip only—No. 6.

Mrs REDMOND: I take it that the Attorney was a happy chappie on Tuesday afternoon then.

The Hon. M.J. Atkinson: Certainly was—I've still got the wad.

Mrs REDMOND: I turn to the issue of the Public Trustee at pages 188 and 189. First, below the two graphs on page 188, I notice that in 2006-07 there was an increase of $4 million in current assets to $11 million, which is over a 50 per cent increase basically on what was there previously. I note that there is also a reference to the building having been sold. At the top of page 189 it refers to the building having been sold for $7.6 million. I take it that is the building in Franklin Street.

The Hon. M.J. Atkinson: It is.

Mrs REDMOND: First, does that completely explain why there is so much more money in current assets? Was the money kept from the sale of that building? Is it set aside for the Public Trustee, did it go into general revenue, or what? What is happening in terms of accommodating the Public Trustee if the building has now been sold?

The Hon. M.J. ATKINSON: My advice is that the Public Trustee was allowed to keep the proceeds of the sale. It was a condition of the sale that they remain there for three years as tenants—which they are. They may remain longer.

Mrs REDMOND: Is there a financial statement anywhere—I could not find one—as to the financial outcome of selling a building and then occupying it under a lease?

The Hon. M.J. ATKINSON: That analysis does exist. It is not in the financial statements. I will give my earnest consideration to sharing that information with the member for Heysen.

Mrs REDMOND: Could the Attorney-General indicate whether there is a financial benefit in some way to the government? It looks like selling off the farm. A building that has been owned for generations and occupied by the Public Trustee for a long time—and it may not be the most modern building in Adelaide but it was sold for $7.6 million—is a significant asset. I am curious as to what prompted the government to sell that property and lease it back?

The Hon. M.J. ATKINSON: It was a broader policy in government to dispose of these assets, but it was done on condition that there be no financial disadvantage to the Public Trustee—and that will be fulfilled.

Mrs REDMOND: Will the minister explain the broad policy of government to sell off these assets? Is it connected in any way with the reference to the acquisition of the old Stock Exchange building?

The Hon. M.J. ATKINSON: My advice is that it is a policy of the Premier's department, which may usefully be taken up on the Premier's appearance in this committee.

Mrs REDMOND: I refer to page 189, which states that the trust funds which reflect significant increases are deceased estates, trusts, court award orders, and so on. Some are going up by huge amounts, but, in particular, for administration matters there is a 54 per cent increase in the trust funds—which is significant, indeed. What exactly is involved in administration matters? I assume, because of the other headings, it is not dealing with the deceased estates, trusts, court award orders, protected estates and powers of attorney that are otherwise listed. What is covered by administration matters? How did they happen to increase by so much?

The Hon. M.J. ATKINSON: The two factors that lead to an increase in holdings by trusts are more clients, and share market investments and other investments doing well. I do not know the answer to the question, but I will get an answer for the member for Heysen.

Mrs REDMOND: On page 202, item 15, 'Other reserves', just below the table, it states:

The reserve for deficits and other losses was created to cover losses made during the administration of estates. Payments amounting to $229,000 were made from this reserve and recoupment of previous years' payments amounting to $83,000 were made to the reserve.

I seek an explanation. Where does one make a loss during the administration of an estate? I am not familiar with that particular reserve.

The Hon. M.J. ATKINSON: We do not know the answer, but we will get an answer. My first thought is that the Public Trustee has a legal obligation to act as executor for people who make wills making it the executor, and the Public Trustee invites that by writing wills for people, provided that the Public Trustee is made the executor. In other cases it becomes an executor of last resort.

Mrs Redmond: I never made a loss administering any estate.

The Hon. M.J. ATKINSON: That is because the member for Heysen had the ability to refuse certain jobs. She did not have a legal obligation to take on estates which had almost nothing in them or which comprised onerous property.

Mrs REDMOND: That is why I recommended that people leave their will with the Public Trustee.

The Hon. M.J. ATKINSON: The interjection illustrates the point I am making, namely, that the Public Trustee becomes the executor and administrator of last resort. My thinking on this—and I will have it confirmed when we get an answer for the member for Heysen (my, won't my department be busy)—is that the Public Trustee must take on many jobs that lead to its making a loss on the transaction—dealing with tiny estates, difficult estates and estates containing only onerous property, which result in a net loss for the Public Trustee. That is part of its community service obligation—something it does. It gives of itself for the people of South Australia—and, accordingly, you will never see that on Today Tonight.

Mrs REDMOND: Perhaps we will try another area of interest. I refer to the Courts Administration Authority, page 305. Just below the table at the top of the page, it states:

The total current and non-current judicial benefit expense (i.e, aggregate judicial benefit plus related on costs) for 2007 is $3,692,000 and $5,196,000 respectively. For 2006, the expense was $2,650,000 and $5,361,000 respectively.

In the next little section under 'Correction of Errors' is a reference to an overstatement from last year of $360,000. However, the expense for 2006 was $2,650,000 and $3,692,000 for this year, which is a difference of over $1 million. Even taking into account that $363,000 referred to in the paragraph below, I am curious as to what has caused that difference.

The Hon. M.J. ATKINSON: The member for Heysen continues to earn her keep by asking detailed questions, and we shall have to get a reply for her on that. What I do know is that the judges are led by a militant shop steward, known as Justice Bleby, who certainly makes demands on the taxpayers of South Australia that are out of all proportion to the capacity of the state to pay. He has no regard for the productivity of the economy and, to some extent, he has prevailed over us.

Mrs REDMOND: While we are on that page, I have another odd question because I have not seen the term before. Is the Supreme Court suitor account (and I notice that on the next page there is a District Court suitor account and a Magistrates Court suitor account) like a trust account that is held in the Sheriff's office? Is it the same thing? Is it where, for instance, moneys paid into court are held? I have not come across the name before.

The Hon. M.J. ATKINSON: Yes, it is a classic trust account.

Mrs REDMOND: I go back to the Attorney-General's Department at page 173. I have just a couple of questions in relation to figures where there seems to be a fair discrepancy from year to year. In particular, on page 173 about halfway down under item 50 'Payables-Administered Items', the first figure for creditors went from $2,476,000 last year to more than $4 million this year, and accruals went down conversely from $1,041,000 last year to only $32,000 this year. Is there an explanation for where those amounts have changed so much and why?

The Hon. M.J. ATKINSON: My advice is that it is end of year reconciliation with Treasury; but, again, we will get a detailed reply and it will be prompt.

Mrs REDMOND: At the same time could I get a reply to the other areas on that page where there are major discrepancies such as the employee on-costs, which reduced significantly from $34,000 to $12,000 this year and, again, payables to SA government entities where similar figures appear and significant discrepancies appear from one listing to the next? Could I ask for that to occur?

The Hon. M.J. ATKINSON: My advice is that the state rescue helicopter has come into AGD administered items.

Mrs REDMOND: With respect to Public Trustee, at the bottom of page 202 there is a listing for operating commitments that did not exist last year. Am I correct in assuming that that operating commitment of one year or less, $638,000, and later than one year but no longer than five years, $1,267,000, is in fact because of the leasing of the Public Trustee's building by Public Trustee?

The Hon. M.J. ATKINSON: I would read the note underneath that entry in the same way as the member for Heysen.

Mrs REDMOND: I again refer to Public Trustee; page 186. There were several matters with respect to financial management and control (about halfway down the page) where some concern seems to have been raised. I had the impression, from something that I read elsewhere, that some of these matters had been outstanding for some little time. The matters raised included: the need to update policies and procedures to reflect current control processes; a number of estate files were not provided in a timely manner for audit review purposes (that one particularly concerned me); and the need to ensure that documentation associated with estate files was complete and filed in a manner which facilitates file review. I will not read the others out.

After reading that, and a couple of other things elsewhere in relation to Public Trustee, it sounded to me as though there had been what I guess one would describe as a degree of sloppiness in relation to the management of Public Trustee files. Does the Attorney-General have any comment in relation to that matter?

The Hon. M.J. ATKINSON: Audit has identified that policies and procedures did not accurately reflect some of the current control processes. This is mainly owing to a new asset management system being in its transition phase, replacing the old asset management system. Although policies and procedures have been updated, they remain in draft stage until the system goes live, in six days' time. They will become active as of 19 November.

Staff had not completed 11 out of 100 requests for estate files in a timely fashion, as they were still actively working on these estates. Staff have been reminded that they must provide files in a timely manner and, if there is a need to retain the file, this must be communicated swiftly. There has been a large increase in workload in both the personal estates and estate services branches.

The increase is owing to the increased complexity of estates, including family conflict, legal issues and family property settlements and an increase in estate numbers. The overall workload increase has created pressure on resources and, as a consequence, some tasks, such as filing and file management, were deferred in the interests of maintaining client services.

Public Trustee has since temporarily employed additional staff to manage the increased workload, and a major review of workload and work practices is well advanced. Temporary staff have been engaged to remove the backlog. We have a new Public Trustee, Mark Bodycoat, and I have every confidence in him.

The CHAIR: The time for examination of matters relating to this report having expired, I call the Minister for Employment, Training and Further Education, the Minister for Science and Information Economy, the Minister for Youth and the Minister for Gambling.

Mr GRIFFITHS: I must admit that I always look forward to reading the Auditor-General's Report but, unfortunately, it has not given me very much to work with in the minister's department. However, I will see if I can keep us busy for half an hour. I refer to page 527. I will start with the perennial question about the number of people who are earning above $100,000. I note that that has increased from 108 employees last financial year to 141 in the 2006-07 year. Interestingly, the real growth has occurred in the number of people earning up to $130,000, which has gone from 75 employees in the previous year to 109. Can the minister explain why such a significant number of people are now earning above $100,000?

The Hon. P. CAICA: I thank the honourable member for his question and I find it very interesting that he looks forward to the Auditor-General's Report. He might find more interesting things in life, but it is part of our job, isn't it? He is right to identify that the number of employees paid $100,000 or more has increased by 33 in the current year, and there is a variety of reasons for that. In the previous year, 53 different employees were paid $100,000 or more in the 2006-07 financial year and they were not included in the previous year's total.

When doing an analysis of the numbers, we know that 19 of that total of 33 fall into the area of educational manager level A and principal lecturers. The 3.5 per cent salary increases under the PSM act and TAFE act put those people who are just under $100,000 just over $100,000.

In addition to that, it has been offset by seven employees included in the 2005-06 financial year totals having terminated their employment, including four with TVSP packages. That was in the previous financial year. In total, it is true that we have increased the level of wages identified by the honourable member. I think we have had the debate in the chamber previously about whether or not people in these categories—and it has not been mentioned by the honourable member but by people on that side—fall into the category of 'fat cats'. They are actually being paid an appropriate level of remuneration for the very important responsibilities that they discharge. As I mentioned, with increases in award increments within those classifications, it is certainly an expectation that others who might fall under the $100,000 category this year will transition into that category the next year.

Mr GRIFFITHS: I understand that it is important to attract the best possible people to work within the department and that they need to be paid an adequate level of remuneration, but in looking at the report it highlighted to me that, last year when I was asking questions about this, I noted that there were eight people who were included in last year's figure who had left during that year and took lump sum figures, so I am presuming that that lump sum payout in some cases would have pushed them above the $100,000 mark, therefore they would have been included when normally they would not have.

This year it was only one person. If you discount those components of it, it equates to an increase by 40 in the number of people who are earning over $100,000 (or 40 per cent). Given that that is a significant increase (and I think anybody would agree with that) it is a large jump within a department to have a 40 per cent increase in those earning more than $100,000.

Minister, could you provide details of the areas within the Department of Further Education, Employment, Science and Technology in which people earning more than $100,000 per year were deployed for the 2006-07 financial year and for 2005-06 for comparison?

The Hon. P. CAICA: I am happy to provide a table that shows the 2006 total of the number of employees and those from 2006 who were not in the 2007 count, which also shows movements across the bandwidths that also detail the net increase or decrease with some note references.

The CHAIR: Are you saying that it is purely statistical in nature?

The Hon. P. CAICA: It is purely statistical.

The CHAIR: Under the old system only one page was allowed.

The Hon. P. CAICA: It is purely statistical with respect to the front page. With respect to the notes, I will provide that to the honourable member for his information. So, the front page is for insertion in Hansard and the other pages for the member for Goyder.

The CHAIR: Will it make sense to future readers of Hansard without those notes?

The Hon. P. CAICA: I believe it would.

The CHAIR: We are satisfied that these are explanatory notes and can be incorporated in Hansard if you so wish.

Leave granted.


Attachment 1
2006 Number of Employees 2006 Resignations In 2006 not in 2007 In 2007 not in 2006
$100,000-$109,999 58 (7) 46
$110,000-$119,999 13 (3) 2
$120,000-$129,999 4 (1) 3
$130,000-$139,999 7 (1) -
$140,000-$149,999 7 (2) -
$150,000-$159,999 6 (2) -
$160,000-$169,999 4 (1) - -
$170,000-$179,999 - - -
$180,000-$189,999 - - 1
$190,000-$199,999 1 - -
$200,000-$209,999 1 - 1
$210,000-$219,999 2 - -
$220,000-$229,999 1 (1) -
$230,000-$249,999 2 (1) -
$240,000-$249,999 - - - -
$260,000-$269,999 1 (1) -
$290,000-$299,999 1 - -
108 (1) (19) 53


Attachment 1 (cont)
Movements across bandwidths 2007 Number of employees Net Increase/(decrease) Note reference
$100,000-$109,999 (30) 67 9 (a)
$110,000-$119,999 20 32 19 (b)
$120,000-$129,999 4 10 6 (c)
$130,000-$139,999 (2) 4 (3) (d)
$140,000-$149,999 1 6 (1) (e)
$150,000-$159,999 2 6 -
$160,000-$169,999 - 3 (1) (f)
$170,000-$179,999 4 4 4 (g)
$180,000-$189,999 1 2 2 (h)
$190,000-$199,999 (1) - (1) (i)
$200,000-$209,999 - 2 1 (j)
$210,000-$219,999 (2) - (2) (k)
$220,000-$229,999 2 2 1 (l)
$230,000-$249,999 - 1 (1) (m)
$240,000-$249,999 1 1 1 (n)
$260,000-$269,999 - - (1) (o)
$290,000-$299,999 - 1 -
- 141 33


(a) The net increase of 9 is due to the:

7 employees who were paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

46 employees who were paid a remuneration in 2007 within this bandwidth but did not get paid $100,000 in 2006

30 employees who are shown in a different bandwidth in 2007

(b) The net increase of 19 is due to the:

3 employees who were paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

2 employees who were paid a remuneration in 2007 within this bandwidth but did not get paid $100,000 in 2006

20 employees who were shown in a different bandwidth in 2006

(c) The net increase of 6 is due to the:

1 employee who was paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

3 employees who were paid a remuneration in 2007 within this bandwidth but did not get paid $100,000 in 2006

4 employees who were shown in a different bandwidth in 2006

(d) The net decrease of 3 is due to the:

1 employee who was paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

2 employees who are shown in a different bandwidth in 2007

(e) The net decrease of 1 is due to the:

2 employees who was paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

1 employee who was shown in a different bandwidth in 2006

(f) The net decrease of 1 is due to the:

inclusion of 1 employee who resigned in 2006

(g) The net increase of 4 is due to the:

4 employees who were shown in a different bandwidth in 2006

(h) The net increase of 2 is due to the:

1 employee who was paid a remuneration in 2007 within this bandwidth but did not get paid $100,000 in 2006

1 employee who was shown in a different bandwidth in 2006

(i) The net decrease of 1 is due to the:

1 employee who is shown in a different bandwidth in 2007

(j) The net increase of 1 is due to the:

1 employee who was paid a remuneration in 2007 within this bandwidth but did not get paid $100,000 in 2006

(k) The net decrease of 2 is due to the:

2 employees who are shown in a different bandwidth in 2007

(I) The net increase of 1 is due to the:

1 employee who was paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

2 employees who were shown in a different bandwidth in 2006

(m) The net decrease of 1 is due to the:

1 employee who was paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

(n) The net increase of 1 is due to the:

1 employee who was shown in a different bandwidth in 2006

(o) The net decrease of 1 is due to the:

1 employee who was paid a remuneration in 2006 within this bandwidth but did not get paid $100,000 in 2007

Mr GRIFFITHS: I refer now to page 513 regarding hourly paid instructors. I note that the 2006 enterprise agreement provided that hourly paid instructors’ weekly teaching hours should not exceed 15 hours per week. The Auditor-General's Report goes on to note that a number of hourly paid instructors had worked in excess of 15 hours per week for a significant number of weeks. My comment is that the procedures in place are a bit flawed and DFEEST has failed to monitor records to ensure that the conditions of the employment manual are being met.

Minister, can you please provide me with details of how many hourly paid instructors is meant by 'a number' and details of the exact number of weeks that is meant by 'a significant number of weeks'?

The Hon. P. CAICA: The honourable member has clearly identified that section of the Auditor-General's Report and he has faithfully reported that component of it. I know that the member for Goyder has a close relationship with the TAFE system within his electorate and I have been his guest in his electorate at Kadina and further south. By way of explanation, as an organisation we still have a responsibility to ensure that those people who have signed up for various courses have the ability to not only finish those courses but ensure that their scheduled program of lectures takes place as and when a program has been promulgated.

As a consequence of that and because of there being limited people in some regional areas with the required skills to ensure that classes are delivered, the number of hours accumulates to more than the recommended 15 hours per week. In answer to the specifics of the question, I do not have the details of how many at this point in time. I will provide those specifics to you once I have them. I will take that component of the question on notice.

Mr GRIFFITHS: As an extension of that—and I probably have the answer in my head anyway—as a result of these people working above 15 hours per week, were there any additional costs, or were those costs just absorbed as part of the programs to provide the courses with no additional wage impost to the department?

The Hon. P. CAICA: They are casual employees and, from time to time, there will be a cost impost regarding any additional hours that might be worked. The variances that apply there is that if, due to sickness, they have to come in to replace a full-time employee—who still continues to quite rightly be paid when they are sick—this will be in addition to the costs that would ordinarily be incurred by that particular course. So, there are variances there, and there are other occasions when there will not be a cost impost. It may be an HPI being replaced by an HPI, and those would have been budgeted for anyway.

On the matter of the hourly paid instructors, there were recommendations within the Auditor-General's Report and in correspondence from the department to the Auditor-General in response to those comments. From a departmental perspective, we will further investigate the issue of hourly paid instructors to seek a response to those specific issues that were deemed to be of non-compliance from the institutes as well. We would expect the institutes to comply with the appropriate procedures, and a review of the employment manual will be undertaken to ensure that tighter controls are put in place to ensure that any non-compliance is either eradicated or minimised. In addition, we are also in the process of preparing regular reports for use by educational managers to assist them in the management of the HPI and their industrial obligations under the management of the HPI system.

It should also be noted that, on occasion, local institutes will seek the approval of the Australian Education Union to enable HPIs to be engaged for periods in excess of 15 hours per week, as per the conditions of the employment manual. So, as we have said, the focus is on managing staff in such a way that, at the end of the day, those people who are signed up to do courses are not disrupted by our inability to stick to the letter of the law with respect to the employment manual.

Mr GRIFFITHS: I certainly respect the fact that the important outcome is the training opportunity to be provided. There is no debate in my mind about that. I certainly also appreciate the fact that, in regional areas, and in some of the metro colleges, it must be very hard to attract the HPIs actually needed to undertake those courses. So, if I discount the regional component of it, if there is an opportunity for information to be provided at a later date about the metro campus system where HPIs are a bit above, I would appreciate that.

I refer to page 512, 'risk management', which is an interesting one. The Auditor-General's Report notes that in the previous year DFEEST had committed to certain risk management activities, including the establishment of an audit and risk management committee, and risk management training sessions were to commence in the early part of 2006-07. However, I note with some concern that the first meeting of the Audit and Risk Management Committee was not until June 2007—very late in the financial year—and that the implementation of the risk management framework policy is proposed for early 2008. Minister, can you explain why the Audit and Risk Management Committee's first meeting was not held until the very end of the financial year, when it was intended to be established in 2005-06?

The Hon. P. CAICA: The honourable member is quite correct in identifying that the Audit and Risk Management Committee did not meet until late in the 2007 financial year. The terms of reference for a DFEEST Audit and Risk Management Committee and a related risk management framework were finalised in 2006. As was pointed out, the inaugural meeting was held on 6 June. Given the time frame taken to finalise external membership, because we brought in people from outside, there was a delay in securing not only the external membership but the people whom we believed were appropriate to sit on this particular committee.

The chief executive has referred the draft risk management framework to the committee that has been established, and significant work has been undertaken to develop the software package and align the methodology to report against DFEEST's strategic objective. I can inform the shadow minister that approximately 200 managers and supervisors undertook introductory risk management training conducted by SAICORP. A revised training approach is being developed as part of an integrated whole-of-department approach to risk management and assessment. This training has been specifically designed to reflect the needs of DFEEST and will target key director contacts and senior executives as part of the software rollout.

It is our view—and certainly the department's view, as I am advised—that this will help to ensure a consistent approach to risk identification, management and reporting across our organisation. So, whilst I can stand before you and say that it has taken some time, certainly we were mindful of making sure that the proper structures were in place before that committee was convened. I am further advised that, since that time, the committee has met three times, with its fourth meeting to occur in December.

Mr GRIFFITHS: I thank the minister for his answer. I picked up on the fact that he mentioned that 200 staff were involved in training at middle management level. That was going to be my next question: had the training sessions actually commenced? Is it intended that those people at that level are the only ones who will be trained, or will there be an awareness program and training opportunities for people below that level?

The Hon. P. CAICA: Whilst the training has occurred for the 200 I mentioned, there are, in addition to that, key contacts or, if you like, key champions who are above that classification and who play a role in that training. In addition, I am advised that there will be more training at a lower level classification than those 200 who have undertaken training to date. Of course, what we want is for the organisation as a whole to reflect the appropriate level of adherence to and understanding of risk management procedures as they permeate through the organisation.

Mr GRIFFITHS: I am pleased with the answers the minister has given because I suppose they were a little prompt for my next question, that is, based on my review of the Auditor-General's Report, I had an assumption that the department showed little interest in risk management. I was going to ask you whether that was true. You have alluded to a slightly different perspective, and I am pleased about that, as it is important that the culture of an organisation understands the importance of it, too, and ensures that it is managed as best as possible.

I move now in my line of questioning to page 516 and some of the financial issues involved. One thing that tweaked my interest was that, in the income lines under Interest, in the 2005-06 financial year it showed interest earned of $2,976,000; however, last financial year it was down to $77,000, or only 2.57 per cent of the previous year. Can the minister provide me with details of why there is such a significant reduction in interest earned?

The Hon. P. CAICA: Before doing so, I note the comments of the member for Goyder. Of course, it goes without saying (but I will say it anyway) that I as minister and my department take the Auditor-General's Report very seriously. I think that in this financial year the Auditor-General's Report has reflected well on the department to the extent that we have taken on board what was identified last year and put them either into practice or into a process whereby they will be put into practice. The point I make in agreement with member for Goyder is that we want that same type of culture with in the organisation that you spoke about.

It is also quite clear that the serious nature of the Auditor-General's Report is such that it provides us with advice and direction about how we can improve all aspects of our financial management of our organisation, and we welcome that. I just make that particular point. In regard to the specific question about interest—and again, as I would expect from the member for Goyder, he nails the point and gets the issue is quite correct—I am advised that the reduction in interest received was caused by the policy decision of the Department of Treasury and Finance no longer to transfer interest revenue to South Australian government agencies.

Mr GRIFFITHS: I am nodding my head in agreement because that is what I thought the situation was; however, I had not actually read it anywhere, so I am grateful for the clarification.

The Hon. P. Caica interjecting:

Mr GRIFFITHS: So that I can ask a question about it and feel like a dill when I know the answer already. On page 512, under Financial Management Reporting and the audit comment and the departmental reply, I note the interesting comment, in relation to the general ledger and data recording, the closing comment of dot point 2 in the middle of the page. It states, 'Despite the variances, the accuracy of management reporting was not materially affected.' That is the departmental reply to the Auditor-General. Can I have more specific information on that? Does 'not materially affected' mean in relation to the budget you are responsible for, that it was less than 1 per cent, or is there a dollar figure you are able to relate to as to the variances between the budget lines? That intrigued me a bit.

The Hon. P. CAICA: I am advised that the organisation put in place a range of new initiatives aimed at a far more rigorous reporting mechanism than existed previously, and that, whilst this series of plans was put in place for that exact reason, in essence they had not been detailed to the extent that the Auditor-General would have been completely satisfied with how these committees were operating. As a consequence they have been subsequently ratified, and we will be making sure that we are able to put in place reporting lines that reflect what it is that we are actually undertaking at this time. As the Auditor-General pointed out, there was never really a material variance or difference; it was a matter of timing.

Mr GRIFFITHS: I refer to page 518—statement of changes in equity. I note that it was necessary to make two error corrections for the 2004-05 and 2005-06 financial years. Can you provide me with details about that, please?

The Hon. P. CAICA: Throughout the 2006-07 financial year a number of incorrect accounting treatments were noted throughout DFEEST operations. Examples of some of these treatments include the expensing of items that meet the asset criteria of the Australian accounting standards and DTF's accounting policy framework and balances in the general ledger that cannot be substantiated or were incorrect. The main prior year adjustments that were made included recognition of airconditioning assets that have been previously expensed, totalling $9.3 million, and net errors in accounting treatment noted from performing reconciliations and reviewing object code balances, totalling $0.8 million.

Mr GRIFFITHS: To clarify that, I am presuming that the costs were actually put down as expenses instead of capital, so, therefore, they did not go on the asset statement. Is that what we are talking about?

The Hon. P. CAICA: The quick response would be yes, to your view. But interestingly, of course, when they were not incorporated they were not identified or picked up by the Auditor-General during that year's report also. Those corrections have been quite rightly made.

Mr GRIFFITHS: Minister, in the few minutes remaining I will ask questions for the member for Morphett in regard to science, innovation and information economy. He has a variety of questions, but I will pick out a couple that can be answered relatively quickly. What is the remuneration level of board members of the Premier's Science Research Council?

The Hon. P. CAICA: I do not have that information with me. I will take it on notice and get back directly to the member for Morphett.

Mr GRIFFITHS: Similarly, the minister might have to get back to the member for Morphett about the remuneration of board members on the Information Economy Advisory Board.

The Hon. P. CAICA: Yes. The only information that I have available is that which you would have seen previously, which relates to all members under DFEEST boards whose income entity falls within a certain bandwidth line, so I cannot identify the specifics within that. But, in relation to the IEAB, I will undertake to do exactly as I said I would for the previous question.

Mr GRIFFITHS: My last question on behalf of the member for Morphett is therefore again under grants and subsidies on page 520—science, innovation and information economy. Can the minister please provide a breakdown list of the $16.7 million for science and innovation and information economy, across those two areas in grants and subsidies, that was provided in 2007, and explain what has changed in comparison to 2006?

The Hon. P. CAICA: I do apologise and I know that we have moved on from that. I think that is a question that is more appropriately asked during the estimates committee. But given my very nature, I will give an undertaking to provide a briefing to the shadow spokesperson on science and information economy to the extent that that would satisfy his queries, but it is an estimates question.

The ACTING CHAIR (Mr Koutsantonis): The examination of this line has expired.

The Hon. P. CAICA: I move:

That the sitting of the house be extended beyond 6pm.

Motion carried.

The ACTING CHAIR: The Minister for Industrial Relations, Minister for Finance, Minister for Government Enterprises and Minister for Recreation, Sport and Racing has a time of 30 minutes allocated.

Mr WILLIAMS: I refer to page 790 of the Auditor-General's report concerning SafeWork SA health and safety workplace partnership program. Given cabinet approval for the scheme to provide $3 million to unions to improve OH&S practices in the workplace, what analysis did the minister undertake to determine the potential effectiveness of this program? For example, have there been or are there such programs in existence in other states and, if so, are there any published results of such programs?

The Hon. M.J. WRIGHT: The honourable member has asked about the analysis, what happens in other states and whether any results have been published. As I have said previously, this is a very important component of trying to ensure that we have greater safety in the workplace. We have done a number of things since coming to government and this is a further policy position that we have adopted: $3 million over three years in grants to unions to make workplaces safer builds on what we have done previously, including things such as having more inspectors. We have obviously changed legislation; we have now embarked upon an advertising campaign. The type of analysis to which the shadow minister refers was undertaken in regard to what we have already put in place and where we want to be. Obviously we want to continue to improve in making our workplaces safer.

From memory, one of the interesting statistics is that the number of deaths for the last financial year was six compared with approximately 17 or 18 either in the year before that or in preceding years. That is still six deaths too many. We really need to be better, and this is what this particular program is all about. Regarding the other couple of questions asked by the shadow minister, I would need to check whether these programs exist in other states and I would also need to check whether there are any published results as well. I will come back to the member regarding the two questions he asked in respect of whether or not these types of programs exist in other states.

Mr WILLIAMS: Referring to the same program, on what basis did the minister refuse to fund the administration of the program from a portion of the monies approved by cabinet? The recommendations to the minister mentioned by the Auditor-General on page 790 of his report included a recommendation that, as the administration would fall to SafeWork SA, a financial contribution from the funds be made towards the cost of administering the program. That came to my attention via a copy of the letter to the minister to which the Auditor-General refers and which I obtained under freedom of information. Subsequent statements from the minister's office confirm that the full $3 million had been allocated to unions. Consequently, I am of the belief that none of the money approved by cabinet for this program was put to the administrative task.

The Hon. M.J. WRIGHT: The shadow minister will let me know if I am not correct in my clarification, but I think he is asking why I did not allow money to be allocated for administrative purposes in respect of that $3 million.

Mr Williams interjecting:

The Hon. M.J. WRIGHT: Yes, as was requested. I was of the view that this money was best spent by being allocated. I was also of the view that SafeWork SA had the administrative capacity to be able to administer these grants so that we did not have to take money out of that $3 million, which, of course, would mean less money being spent at the coalface doing what we want to do—that is, making workplaces safer. It was a conscious decision and obviously a discussion was held in regard to it, but we thought that SafeWork SA did have the capacity to be able to administer these grants without taking money out of the program.

Mr WILLIAMS: I now refer to page 816, the SafeWork advisory committee. Minister, given that the committee has a statutory role of providing advice to you regarding grants for OH&S improvement and OH&S programs, why was the committee not consulted regarding the workplace partnership program?

The Hon. M.J. WRIGHT: The member has asked me that question before but I am happy to answer it again. I have answered it actually. In part, I answered this question with my first answer to your first question. We saw a vacuum and a need to provide some additional resources so that we could do better when it came to workplace safety. We have put in place a number of measures since we first came to government in 2002. We are seeing more inspectors on the ground and more prosecutions. We have tougher legislation and money for advertising. This particular grant money, which is allocated to those sectors where there is the highest percentage of injury, we thought was a no-brainer.

As a consequence, it was a policy decision taken by government. Governments do that from time to time. They make policy decisions and that is what being in government is all about. It is not to underestimate the value of the SafeWork SA Advisory Committee. I know it states 'council' here but it is the SafeWork SA Advisory Committee. As the shadow minister would agree, it is made up of some very good people, including Don Farrell, Janet Giles, Maurie Howard, Martin O'Malley and Tom Phillips. They fulfil a very important role. By the way, Don Farrell has resigned. He is going onto greener pastures, as the honourable member would be aware.

Mr Griffiths: No. 1 on the Senate.

The Hon. M.J. WRIGHT: I think he has a chance of getting elected. Mind you, with the Labor brand, I think this time a lot will get elected, especially in South Australia.

Mr WILLIAMS: Minister, given your last answer—indeed, all your answers on this matter—how is it you have given $3 million of taxpayers' money to unions to run OH&S programs when the unions represent less than 17 per cent of the workforce in the private sector in South Australia? How do you hope to get to the other 83 per cent of the workforce? How do you hope to achieve improvement in OH&S in the workplace for the other 83 per cent of the workforce?

The Hon. M.J. WRIGHT: One only has to look at the various unions and the areas for which they have constitutional coverage. The list includes the Independent Education Union, the Australian Services Union, the Liquor Hospitality and Miscellaneous Union, the Communications, Electrical and Plumbing Union, the Australian Manufacturing Workers Union, the Australian Workers Union, the Textile, Clothing and Footwear Union, the National Union of Workers, the Shop Distributive and Allied Employees Association, the Australasian Meat Industry Employees Union, the Construction, Forestry, Mining and Energy Union and the Transport Workers Union. It is a broad cross-section of people at the coalface.

As I said earlier, we are hitting those targets. Off the top of my head, something like 83 per cent of injuries occur in the sectors where this money is being spent. I think it is a good thing. I know the honourable member thinks differently. That is fair enough and he is entitled to do so. Whether it be a state government or a federal government (where money has gone to employers for good reason) we think this is for good reason. Already, I have launched one program. For example, the SDA has put together a brilliant DVD about safety in the workplace. I launched it a few weeks ago. Employers were there and they were rapt in it. I think members opposite will see this money being well spent.

Mr WILLIAMS: Is it a condition of these grants to the unions that the unions will provide OH&S training to non-union members, as well as union members? Is it a condition that they will provide the training at the same cost, given the taxpayer will be subsidising the programs? I have logged onto the websites of most of the unions and I have looked at programs they run in the OH&S area, and they have a differential charge for non-union members. The question is: was it a condition of payment that, where they run a program that is available to both their members and non-union members, there will be no differential charge? And I refer page 790 where the Auditor-General talks about the partnerships program.

The Hon. M.J. WRIGHT: I need to check that for the honourable member. It would depend on the conditions of their funding agreement. I understand there are 12 of them and some 11 have been put in place already. I do not know the answer. I will come back with the detail for the honourable member. Whether it be this particular program or other programs—and I speak with some experience—unions are about not only educating their members but also trying to attract members to their union. That does not necessarily answer the question, but it gives a clue as to what my suspicion is. We need to go back and check the individual funding agreements; and I will do that for the honourable member.

Mr GRIFFITHS: I want to pursue questions in relation to your role as Minister for Finance. I refer to Part C, 'State finances and related matters'. Page 39 talks about the nature of savings initiatives. There are several references in the report about shared services reform. Page 39 states:

[There is an] aim to save $130 million over four years (including savings from Future ITC and associated changes) but involve implementation costs of $60 million.

Can you tell us whether the shared services reforms are on track to deliver those budgeted savings?

The Hon. M.J. WRIGHT: By way of background, the 2006-07 budget estimated savings of $60 million from this reform and ICT procurement. Future ICT savings were $25 million of that $60 million per annum, and that has been achieved, leaving shared services with a savings task of $20 million in 2008-09 and $35 million ongoing from 2009-10. To answer the member's specific question, we are on track with regard to that. We are now in the pre-transition discovery phase, and we expect to be transitioning the first services in the first quarter of 2008.

Mr GRIFFITHS: I thank the minister for his answer. I have accessed the website recently and looked at the regional impact assessment statement that was undertaken and the electronic versions of the newsletters that are published by the officer in charge of that section. As someone who has unreservedly come into this place to try to protect the rights of people in regional South Australia—

Ms Breuer interjecting:

Mr GRIFFITHS: —the member for Giles confirms that—I want to focus for a little while on the information that is out there now about the job cuts that are to occur in the regions. My understanding is that 558 government jobs, which equates to 256 full-time equivalent people, will be affected as part of the shared services reform. I know it is anticipated that some changes will happen in the first quarter of 2008. In answer to a question in the house previously, the minister used the term 'in scope'. From my point of view, I just want to really make the minister appreciate the fact that 'in scope' is not just numbers, it is actually people, because it is an important issue for me.

The Hon. M.J. Wright: Yes, I agree.

Mr GRIFFITHS: Given that the minister understands that (for which I am grateful), what will happen to those people who will be told that their jobs no longer exist? What transitional arrangements will be in place?

The Hon. M.J. WRIGHT: I agree with what the member is saying, and we do not underestimate the significance. We are talking about approximately 250 full-time equivalents, which of course is more people than that (which the member fully understands), from the regional areas. Those jobs will be moving to Adelaide.

We will be working with those people, and regional employment principles and processes will be put forward. We will work with the individuals and the agencies. If it is the case that a person will not come to Adelaide, that is where we will need to work closely with the individual and also with the agency to see what other options might be available.

Mr GRIFFITHS: Some examples have been quoted to me where, as part of a full-time equivalent position, for instance, 0.4 of a person's role is devoted to an issue that will be caught up within the shared services reforms. Those people will then face the choice of deciding either to move to Adelaide if a position is available for them or to stay where they are, where that component of their role is no longer there. With respect to the people who might lose a percentage of their position, is it the intention to allow them to backfill somehow through some further rationalisation, or will only the remaining portion of their role be available to them?

The Hon. M.J. WRIGHT: It would depend upon what proportion of their job is in scope. If there is a high percentage of it in scope, they would be expected to move. However, if it is a low percentage, they may not be expected to move, particularly if it is not envisaged that that other percentage will come into scope. That is generally the way in which it will work.

Mr GRIFFITHS: Just so that I am very clear in my own mind, therefore, will they be able to retain only that portion of the role that still exists for them? If they were full time, now they suddenly become 0.5 or 0.6, whatever is left, and that is all they can get; there is nothing else for them?

The Hon. M.J. WRIGHT: I will take that part of the question on notice and obtain clarification for the member. I will come back with some greater detail for him.

Mr GRIFFITHS: I appreciate that, because the minister would understand that multi-tasking and multiple skilling is an important role in all workplaces. I am sure that a lot of people will be caught up in this, so it is an important aspect for members of the opposition to understand.

I again focus on the regional issues as it relates to shared services. I understand that the health department is estimated to be losing 186 full-time equivalent positions and DFEEST 43 full-time equivalent positions. It is probably an objective thing, and I know that the challenge is, therefore, upon those departments to manage their roles within their respective service areas. However, as the minister responsible for the shared services reforms, is the minister completely confident that there will be no impact on the quality of services provided, in this case, to hospitals and TAFE colleges in the regions?

The Hon. M.J. WRIGHT: That is an important question and a good one. The whole rationale of shared services is that there will not be a decrease in the services provided and there will not be a decrease in the services provided to the regions. That is obviously one of the challenges. As to those numbers that you refer to, different agencies will have different numbers—some higher than others because of the size of their departments—but it is very much the policy that the services will not diminish as a result of shared services. The savings will be turned back into front-line services.

Mr GRIFFITHS: The Auditor-General's Report notes that audit experience has shown that a lack of clarity in roles leads to failures in some control systems. Minister, can you confirm whether the planning and analysis of the shared services reforms which are to be implemented will ensure that clear guidelines are set out so that the program is successful in creating these savings? Can you also provide me with some examples of that?

The Hon. M.J. WRIGHT: I think that the shadow minister is referring to the responsibilities of shared services and the responsibilities of agencies. A service level determination and a service catalogue will clearly state the services that will be provided, including the roles and responsibilities. Yes, what the shadow speaks about is important; there needs to be a clear delineation between shared services and the agencies, and we will achieve that as a result of the service level determinations and the service catalogues, amongst other things.

Mr GRIFFITHS: I would like to talk about audit plans now. You outlined the expenditure and the projected savings that will occur in future years, but are you able to give us any figures on the audit plans to review aspects of the progress of shared services reform? How much is going to be spent during the 2007-08 financial year?

The Hon. M.J. WRIGHT: I think you are asking how much shared services is going to spend this financial year?

Mr GRIFFITHS: In reviewing the progress of it.

The Hon. M.J. WRIGHT: I would need to take that on notice and get an answer for you.

Mr GRIFFITHS: As an extension of that—and I understand the confusion in my question and I apologise for that—how often will audits be undertaken to monitor the progress of the project?

The Hon. M.J. WRIGHT: With regard to auditing, what is done by the Auditor-General will be a matter for him but in regard to internal auditing, if you like, we have a governance committee in place comprising five chief executives on the chief executive steering committee. That meets fortnightly; so, if you like, that would be auditing on a regular basis. I meet with the Under Treasurer on a regular basis, so, to answer the question, it is probably being done at the moment as a result of the regular meetings. That chief executive steering committee comprises five chief executives from the bigger agencies, as you would expect. Also internal auditing will occur as we go along.

Mr GRIFFITHS: I will ask one last question on this section. I have noted the electronic newsletters that are in place on the website from the executive officer of the section but they are in reasonably broad terms; I know that they are there for a lot of people to read. But as to the discussions that take place amongst this group of five people, especially where it reviews the progress of the shared services reform and whether it is keeping up-to-date, is that sort of information intended to be published on the web site and available to communities to review? From the first quarter of 2008, when it really starts to hit home about what shared services is going to mean in a physical sense to communities and people in the suburban areas, there is going to be a requirement for knowledge to be out there. Is that sort of detail intended to be included for information available to the community at large?

The Hon. M.J. WRIGHT: I thank the shadow minister for his question. Obviously, communication will be very important, and it has been important already. A lot of communication has occurred, particularly with public servants. There has been a whole range of briefings and newsletters, as the member has referred to but, whether it be the decisions of cabinet or the decisions of the Chief Executive, Shared Services Steering Committee, to which I referred earlier, communication will continue to occur with public sector employees through monthly newsletters and regular updates to the website. So, for the general public, I think that will be an important form of communication: regular presentations to establish government and agency forums and with the appropriate unions. I know that there are regular meetings with the PSA, for example. So, you are right; as things roll out next year, there will be that need to ensure that the communication lines are open and that there is good and broad communication not only to the employees but to the broader community as well.

Progress reported; committee to sit again.

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