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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-10-28 Daily Xml
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Auditor-General's Report

AUDITOR-GENERAL'S REPORT

In committee.

(Continued from 28 October 2009. Page 4458.)

The ACTING CHAIR (Hon. P.L. White): We are considering the Auditor-General's Report 2008-89. I call on the inquiry of the Minister for the River Murray and Minister for Water Security. Are there any questions of the minister?

Mr WILLIAMS: I draw the committee's attention to page 1354 of the Auditor-General's Report. I note that there is a current asset increase of $54 million due to, amongst other things, unused temporary water allocations. I also refer the minister to page 1365, 'Water allocations—permanent' and 'Water allocations—temporary' in gigalitres. How much water is held by SA Water as per the statement at the bottom of page 1369 for critical human needs for each of the water use years 2009-10 and 2010-11, including any carryover from the 2008-09-year?

The Hon. K.A. MAYWALD: I will provide a detailed answer to the honourable member. We have a requirement to get 201 gigalitres for critical human needs through the River Murray system for our country town licences and our metropolitan Adelaide needs and, also, stock and domestic needs. I can confirm that 39 gigalitres was carried over from purchases last year into this year, but as to the actual purchase amounts I will get the details for the honourable member and provide a statistical answer.

Mr PEDERICK: I refer to Volume V, page 1699, 'Save the River Murray Fund', the first paragraph, last sentence, which states:

These monies are then to be paid into the fund and may be applied by the minister toward programs and measures to improve and promote the environmental health of the River Murray or ensure the adequacy, security and quality of the state's water supply from the River Murray.

On DWLBC's website describing the Save the River Murray Fund, its purpose and the Living Murray fund it supports, there is no reference to using the fund to ensure the adequacy, security and quality of the state's water supply from the River Murray. At what stage and by what authority was the fund's purpose changed from being for the environment to include water security and water supply?

The Hon. K.A. MAYWALD: The fund has always been to secure water for the environment and enhance and implement environmental programs in the state towards a healthier River Murray in South Australia. The Save the Murray levy was identified as a funding source for the Living Murray initiative, and South Australia's contribution for the purchase of water (35 gigalitres) was secured through the Save the Murray levy. There has been no inconsistency in the application of the fund in accordance with the way in which it was established in the first instance. An annual report is presented to parliament every year on the details of the application of the water in accordance with the principles of setting up the fund.

Mr WILLIAMS: I refer to page 1352. Under the 'Expense' heading, it is noted that there was an appointment of additional employees for drought and water security initiatives. How many additional employees were appointed under each of these two initiatives and what is the total number of FTE employees for SA Water as at 30 June 2009? Is it intended that any of the additional staff employed under those aforementioned initiatives be shed when the drought ends?

The Hon. K.A. MAYWALD: A substantial investment from this state government has been appropriated through general revenue for drought programs. SA Water has been providing support to those drought programs. A number of the initiatives involve SA Water providing water security. In regard to the exact number of staff that have been employed in each division to deal with drought-related issues, I will come back to the member with a detailed answer on that question.

There are a number of issues that we have been required to address as a consequence of the drought, and agencies across the board are providing a collective response through the Water Security Council to those measures. The Water Security Council identifies projects that are required to be undertaken to secure our water supply so that we can manage in the extreme conditions that we are dealing with at the moment and assigns different tasks to different agencies, including SA Water, to project manage different projects on behalf of the government. I will come back to the house with the details of exactly how many employees.

Mr WILLIAMS: There are two other parts to the question. What are the total FTE numbers for SA Water as at the end of June and will the employees taken on specifically for drought measures be shed when the drought breaks?

The Hon. K.A. MAYWALD: The employment of any employees specifically funded under the drought funding will expire when that funding is no longer available. The drought funding is contingency money that has been applied to specific drought programs to assist us to manage in a very difficult time. They are relevant to the project that is being undertaken and, of course, once the drought funding concludes—hopefully, when we achieve recovery—those programs will no longer be required to be funded and therefore the people associated with those programs will not be employed.

Mr PEDERICK: I refer to Volume V, page 1693, 'Corporate Governance', and the grant management framework. The last sentence states:

DWLBC has advised that developing a policy/framework was not considered an imperative or priority in the short term but that it will consider the development of a framework as part of its overall continual improvement processes.

My question therefore is: given that the auditor has recommended this action in previous years to better manage significant grant-funded initiatives and grant income and expenditure, why has the department continued to give it a low priority?

The Hon. K.A. MAYWALD: The Auditor has identified areas where he expressed a desire for the agency to address matters relating to the grants program. The department has had significant discussions with the Auditor-General and explained to him that under each of the grants programs there are different clients, there are different customers being serviced and there are different requirements on the funds coming through DWLBC and the way they need to be applied. So, the governance arrangements are built to be specific to the particular needs of the program that we are administering on behalf of whoever the customer or client is, whether it be the federal government or others.

We have also identified the process that is in place, that is, that all of these grants administrations must be managed in accordance with Treasurer's Instruction 15, and we believe that to be a sufficient overarching management of the grants program.

Mr PEDERICK: This has gone on for years, and I am still at a loss as to why it is deemed in the Auditor-General's Report to be a low priority by the department.

The Hon. K.A. MAYWALD: For exactly the reasons explained. The department believes it is adequately being managed through Treasurer's Instruction 15. Complying with Treasurer's Instruction 15 has exactly the same effect of having an overarching framework, because Treasurer's Instruction 15 is an overarching framework for grants administration across government.

Mr WILLIAMS: I refer to Volume IV, page 1355. The fifth dot point near the top of the page notes an expenditure commitment for the operation and maintenance of the desal plant of $600 million. On page 1357 it is noted that on 16 February the operation and maintenance contract was signed for a 20-year period. It is further noted that cabinet approved capital expenditure for expansion from 50 gigalitre to 100 gigalitre capacity on 1 June 2009, five months later.

Does the $600 million operation and maintenance commitment cover the full 20-year cost? Is this cost applicable just to the 50 gigalitre capacity plant; and, if so, what will be the impact of increasing the capacity to 100 gigalitres? What are the implications of turning the plant on and off and having a varying output? Is the $600 million contract a take-or-pay contract, or will we see a variation in the cost of operation and maintenance as we turn the plant on and off?

The Hon. K.A. MAYWALD: I certainly will take the details of that question on notice but I will give the member some broad principles. Basically, the comment on page 1355 refers to the decisions that were made for a 50 gigalitre plant. There will, of course, be impacts on the operational costs depending on the variable use of the plant. Yes, the price will go up and down depending on how often it is switched on and off.

SA Water is currently working through the development of a profile for how water will be sourced from different resources under different conditions, which will include when and how the desalination plant will come into effect. The detail of that is currently being established, and there will be a whole range of different scenarios depending on the climatic conditions at the time. The ongoing operation and maintenance contract enables us to switch the plant on and off as needed.

Mr WILLIAMS: I know SA Water has signed a contract with AGL for power supply. Does the $600 million commitment for operation and maintenance include the cost of power, or is that exclusive of that contract?

The Hon. K.A. MAYWALD: The $600 million would have included the estimated costs of the electricity at the time of that decision, which was the 50 gigalitre plant. The 100 gigalitre plant, as I said before, will have additional costs if it is operating at full capacity. The AGL contract includes the full 100 gigalitre operation, of course, on renewable energy. As I said, the $600 million is a number with respect to which I will come back and update the house once I have the information from SA Water about the impacts of the decision to go to 100 gigalitres—a very good decision.

Mr PEDERICK: I refer to Volume V, page 1693, 'Water Information Licensing Management Application system'. The first sentence states:

Audit has previously reported upon the limitations of the Water Information Licensing Management Application system.

These limitations include compliance with aspects of the NRMA, effective management of outstanding debtors and provision of complete and accurate data. A further note in the report refers to a required error correction totalling $506,000. Similar recommendations in earlier reports for certain action to be taken on various matters is a recurrent theme in this department. To quote the report, why has limited progress been made in this area, and is the minister fully satisfied with the limited progress that has been made in recent years?

The Hon. K.A. MAYWALD: It is directly attributed to the unbundling of water rights and the work that is going on at the national level towards a national register. WILMA, from a financial perspective, has become somewhat problematic. Due to development requirements in WILMA to enable unbundling of water rights and national developments in striving for a water register with compatibility, a decision was made to develop the financial part of the system as a separate module.

The WILMA Finance Transition Project was developed during 2008-09 to ensure that a solution was developed to finally alleviate the Auditor-General's concerns of the past. During this period, because this is effectively an accounts receivable system, Shared Services SA, as mandated operator of the government's financial transaction system, has needed to be briefed and be brought up to speed with respect to the DWLBC's proposed solution. The proposed solution has now been resolved and will be available for implementation in early 2009-10.

This is not to say that nothing has happened in 2008-09—quite the contrary. DWLBC undertook independent testing of transactions on a monthly basis in order to provide comfort to the Auditor-General as to the integrity of the existing manual system. This is undesirable, costly and inefficient and not a long-term solution for the department. This process resulted in an error correction of $506,000 to the 2007-08 financial year, in accordance with the provisions of AASB 108. The restatement has been made to the earliest prior period presented in so far as it is determined practicable for the purposes of AASB 108. The 2008-09 account balances are correctly stated.

This disclosure comprises an adjustment to the carrying value of accounts receivables that were previously overstated in the department's Water Information and Licensing Management Application system. The action that DWLBC is also taking now is that it has formalised a high level system solution that is based on utilising a clustered ICT infrastructure arrangement involving existing Westpac and Shared Services SA environments, a project board and project plan and an implementation and communications strategy. The project is currently tracking to plan. It is highly complex in nature, and made more so because of the existing manual-based systems that have been used to identify, record, account and manage existing debtor information. However, the good news is that it will be fixed in 2010.

Mr WILLIAMS: Well done, minister. You picked one of the questions we were going to ask and had a substantial prepared answer. I refer to page 1354—

The Hon. S.W. Key: You're so transparent!

Mr WILLIAMS: Well, she got one right after six. I thought we had done a reasonable job, Steph. I refer to the first dot point on page 1354, explaining the change in total assets. It notes assets contributed by developers of $39 million. It also notes the Glenelg to Adelaide recycled water project of $58 million and the Lower Lakes pipeline project at $25 million. Given that those two projects and the Virginia project (for which I have not listed the cost) were funded by the commonwealth government, will they be considered as contributed assets for the purpose of calculating water price increases when considering the return on capital or will they be considered as shareholder assets (as I think the minister referred to), notwithstanding that they were not paid for by the South Australian government?

The Hon. K.A. MAYWALD: I am advised that they will be considered as contributed assets.

Mr PEDERICK: I refer to Volume V, page 1717, 'Grants and Subsidies', line 3, 'Irrigators—Lower Murray reclaimed irrigation areas'. What future work or support will be provided to maintain the integrity and function of works carried out on river banks and levies in this district, bearing in mind the department has stated that in 2009-10 it would maintain the Lower Murray embankments to preserve the river channel and prevent flooding of adjacent farming?

The Hon. K.A. MAYWALD: This is a very complex issue, which has been exacerbated by the extreme drought conditions and the dropping of water levels in the River Murray. A task force has been established to look at and develop solutions for the issues that the irrigators and other landowners are experiencing as a consequence of the current circumstances. There is no simple solution, and we are working as best we can with the community to try to identify what can be done and what can be achieved in the future for those communities. That task force is yet to report, so I have no further advice on that as yet.

Mr WILLIAMS: I refer to page 1358, which notes that a separate project team has been established within SA Water to deliver the desalination project. Has this entailed the employment of additional staff? If so, how many and at what cost, and is this cost included in the $1.824 billion cabinet approved for the project or is it additional to that money?

The Hon. K.A. MAYWALD: An extremely expert group of people have been employed, as I understand it. I am advised that about 40 have been employed with respect to the project team and the costs of employing those people are included in the $1.8 billion.

Mr PEDERICK: I refer to Volume V, page 1692, 'Implementation of the revised Treasurer's Instructions 2 and 28'. The last sentence states:

DWLBC has advised that it has a documented strategy and timeframe in place to work through and resolve the above issues.

The issues referred to are business plans, disaster recovery, business continuity plans and internal and external communication protocols. My question is: what is the time frame for completion of the work being done to address the Auditor-General's concerns about a business plan, a disaster recovery plan, communication protocols and accounts receivable debtor management?

The Hon. K.A. MAYWALD: I have been advised by DWLBC that these are matters that DWLBC raised with the Auditor-General and that it was pointed out to the Auditor-General that, whilst there were separate disaster and recovery plans and business plans, there was yet to be developed an overarching plan to encompass all of those. This work is underway and we expect that the work will be concluded during the 2009-10 financial year.

Could I perhaps ask the members opposite if, rather than my advisers having to jump up because we are switching from SA Water to DWLBC, we could ask the SA Water questions en bloc and then the DWLBC questions en bloc? It would just make it easier for the people who are moving in and out of the chamber.

Mr WILLIAMS: I thought your advisers would like the opportunity to get up and walk around and get a bit of exercise. We will do two or three at a time and see how we go. Referring to page 1352, it is noted that increases in electricity costs are due, in part, to renewable energy and carbon offset programs. Can the minister explain to the community exactly how much renewable energy is purchased by SA Water, what carbon offset programs, if any, have been utilised in the 2008-09 year, and what is the cost of each of these initiatives?

The Hon. K.A. MAYWALD: The matter that the member refers to does not include what is happening with renewables with the desalination plant. These are other programs and we will provide further details of those to the house. I do not have the specific details of each and every one of the programs, but we have committed to a program on an annual basis of investing in renewables and also carbon offset programs and I will provide the details to the house.

Mr WILLIAMS: I refer the minister to page 1385. In the notes in the accounts under key personnel compensation, it lists post-employment benefits for 17 key management personnel of $632,000. The 17 key management personnel include the seven directors. Can the minister specify what are the post-employment benefits and specifically to whom they accrue?

The Hon. K.A. MAYWALD: It is the remuneration of the directors. Four directors are between $40,000 and $49,999. In the $50,000 to $59,000 bracket, there is one who is the chair of the Audit Committee. In the $90,000 to $99,999 bracket, there is one who is the chairman of SA Water, and the final one is the chief executive of SA Water.

Mr WILLIAMS: I questioned you specifically about the post-employment benefits. I am presuming it relates to superannuation. The question is: do any of those benefits accrue to directors or do they just accrue to the balance of the key management staff who, I assume, would be the 10 employees of the corporation?

The Hon. K.A. MAYWALD: I believe that is correct but, if it is not, I will get back to the member and provide details. I do not believe it accrues to directors.

Mr PEDERICK: I refer to Volume IV, page 1351, under 'Implementation of the revised Treasurer's Instructions 2 and 28'. The first line states, 'the Corporation engaged a contractor to conduct an independent review of the Corporation's compliance with TIs 2 and 28'. My question is: what was the cost of that review?

The Hon. K.A. MAYWALD: The costs are included in the costs of the overall internal audit review, and I am advised that the approximate cost of that particular component of the review was around $20,000.

Mr WILLIAMS: I refer to page 1354 where it is stated that the biggest impact on the corporation's profit—noting that the corporation's profit decreased somewhat—has been various drought and water security initiatives causing higher operating and financing costs. Can the minister specify any costs under the higher operating reason—so, what higher operating costs other than the aforementioned increases in employees—and specify what drought and water security initiatives have incurred additional financing costs? Could the minister please itemise those costs?

The Hon. K.A. MAYWALD: I will come back with a complete list for the member, but just to give an indication of the kind of projects that that includes, there is, for example, the advanced pumping of water into the Mount Lofty Ranges which requires additional energy costs, and there is a whole range of other activities associated with the preliminary works and investigations for the weir and various other programs that SA Water is involved in. I will get a detailed list, but that is to give you an indication of the kind of projects that will be on that list.

Mr WILLIAMS: At the bottom of page 1357 it is noted that at 100 gigalitres capacity per year the Happy Valley distribution system is unable to distribute the output from the desal plant, and that a further interconnection between the Happy Valley system and the Hope Valley system will be necessary. Can the minister confirm that the $403 million projected cost is in addition to the $1,824 million cost of the desal project?

The Hon. K.A. MAYWALD: Yes, I can confirm that.

Mr PEDERICK: I refer to Volume V, page 1693 under 'Payroll', dot point 2:

Establish a central register to record and monitor the timely review of these reports and require follow up of all outstanding reports.

Why has the department chosen not to follow the Auditor-General's recommendation, also made in previous years, to establish a central register?

The Hon. K.A. MAYWALD: First, the comments that have been made by the Auditor-General are around process but they have not actually identified any areas where there has been a failing in the system that currently exists. The issue we have here is that the DWLBC has determined that we are able to undertake the assessment that the Auditor-General requires through, firstly, having further advice and education of the directors on their responsibilities, and then also using our internal audit procedures to be able to do internal audits, and we believe that will be sufficient to actually ensure that the objectives suggested by the Auditor-General can be achieved.

Mr WILLIAMS: I refer to page 1352 where it talks about other income and it notes that, 'Other income includes contributed assets and recoverable works.' What is the total contributed assets, because there is a $7 million figure that it is said is the increase in contributed assets? I am trying to get my head around what have been the contributed assets for the 2008-09 year. I assume that the recoverable works are works which have been performed by SA Water where it recovers the cost of performing that work, and I am assuming that those costs have been paid for by some private individual or business. Do those costs therefore, then become contributed assets or do they become, automatically, a part of the corporation's asset, again when that figure is being used to set water prices in the future?

The Hon. K.A. MAYWALD: There is a lot of detail in that question, so I will take the question on notice, but I will answer a certain section of it. The recoverable works include things like extending the network to accommodate new developments and the like. There are also recoverable works that are undertaken by SA Water for DTEI, and those sorts of things, when projects are requiring the moving of infrastructure from road construction, and those sorts of things; recoverable assets are also included in that. So, the details of how much is applied to each I will have to come back to the member with, and I will take the question on notice.

The CHAIR: Thank you, minister, and thank you very much to the members, who provided a very orderly examination. It was a delight to chair. We now move to the examination of the Minister for Environment and Conservation, Minister for Early Childhood Development, Minister for Aboriginal Affairs and Reconciliation and Minister Assisting the Premier in Cabinet Business and Public Sector Management.

Mr WILLIAMS: I refer to Volume II, pages 403 and 404. The Auditor-General's Report indicates that the EPA has a budget shortfall due to the decline in the predicted waste levy. How does the minister believe he will cover the EPA's budget shortfall? Does the minister believe that the decline in revenues from the waste levy are related to a rise in illegal dumping, as was anticipated when the levy rates were doubled in 2007?

The Hon. J.W. WEATHERILL: To answer the second element of the question first, the projections about what revenue might flow through the waste levy obviously have to be looked at in the light of experience. The global financial crisis was expected to have an effect in relation to economic activity generally, which has an effect on construction activity—a large contributor to waste to landfill—and that has the effect of reducing the revenue because the EPA's revenue is tied to that. The actual experience may vary from that, so that is something we will have to monitor. There is no suggestion that illegal dumping is the reason for any projected shortfall in revenue.

As for how that would be dealt with, generally, if there is a shortfall and if it comes to pass that we need additional revenue to cover the expenses of the EPA, then that is a matter that would be the subject of discussions with Treasury. If there were to be a deficit, that shortfall would be made good by the general Consolidated Account.

Mr WILLIAMS: I refer to Volume II, page 377. Could the minister explain why grants and subsidies to community organisations and associations have been cut by $1 million between the 2008-09 years from $2.5 million to $1.5 million, yet entities within the SA government have seen a 50 per cent increase in grants and subsidies from the same two periods from $533,000 to $1.8 million?

The Hon. J.W. WEATHERILL: Which organisation are you talking about?

Mr WILLIAMS: I refer to page 377. At the top of the page there is a table which shows that grants to community organisations and associations have reduced from $2.4 million to $1.4 million and, at the same time, we have seen entities within the South Australian government receive a 100 per cent increase in their grants from half a million dollars to a bit over $1 million?

The Hon. J.W. WEATHERILL: I think I will take that question on notice.

Mr WILLIAMS: I refer to Volume II, page 356, which states:

Over a number of years audit has commented on the accounting treatment of crown land and the completeness and accuracy of crown land base information.

What steps will the government take to ensure that the accounting statements of the crown land are accurate and complete?

The Hon. J.W. WEATHERILL: This has been the subject of observations by the Auditor-General on a number of occasions. The fundamental issue is that it arises due, obviously, to the large number of crown land parcels across the state and the resources that would be necessary to deal with that. The audit qualification relates to the inability to identify all of the land and determine an appropriate value for the assets.

The crown lands database project, which was initiated in relation to similar concerns in 2007-08, is progressing, addressing the identification issue. The scope of the project includes: changes to the tenements and billing system; an analysis of data quality and data cleansing requirements; implementation of appropriate conversion processes from the land ownership and tenure system; and implementation of the interface between the tenements and billing system and masterpiece fixed assets.

During 2008-09, the department's crown lands database project made significant progress, with the completion of a majority of data cleansing required to ensure the integrity of crown lands data reflected in the system as well as the transfer of data from the previous system. Activities planned for 2009-10 include the finalisation of appropriate valuation methodology for crown land and reflecting unallotted crown land in the administered financial statements for the first time. This work will involve working closely with Shared Services SA, due to the transfer of the fixed asset accounting function, as well as early engagement with the Auditor-General's Department.

It is worthwhile noting that the necessary verification and valuation of these tenures is labour intensive and requires significant resources, and, as such, will be phased in over a period of time and within available resources. So, it is a massive exercise. It is a council of perfection to have it all done, but we are gradually working through it.

Mr WILLIAMS: It is interesting that the Auditor says that the department has been unable to formulate a suitable methodology, but the department was able to come to some sort of methodology with regard to shacks on crown land.

The Hon. J.W. Weatherill interjecting:

Mr WILLIAMS: I'm glad to see that the department has its priorities right, minister. I refer to Volume II, page 382. The department has also failed to include unallotted crown land in the administered financial statements in 2007-08. The department held 104 parcels of land, which were then required to be held for sale as the parcels had been identified as surplus. In the '08-09 year, only 12 of those parcels were sold, and the remaining parcels were classified as 'held for sale'. Does the minister intend to sell the remaining parcels of land?

The Hon. J.W. WEATHERILL: The intention is to transfer the remaining parcels of land into crown land so there is no intention of selling those parcels of land.

Mr WILLIAMS: I refer to Volume V, page 1692, which states:

An internal review of DWLBC's implementation of TIs 2 and 28 highlighted the following:

Business plans have not been completed to the 2008-09 financial year.

No disaster recovery/business continuity plan exists.

No internal and external communication protocols have been documented and approved.

DWLBC does not currently have a policy or procedure in relation to accounts receivable/debtor management.

DWLBC advised in response to the 2007-08 audit that it planned to have the grant management framework completed by the first half of 2008-09. Clearly, this has not been completed. Will the minister advise why there has been a delay?

The Hon. J.W. WEATHERILL: I understand that minister Maywald received that question and answered it.

Mr WILLIAMS: Is that right? That is interesting.

The Hon. J.W. WEATHERILL: To the extent she did not answer it, I am prepared to take it on notice, but I am advised that she did answer it.

Mr WILLIAMS: Thank you. I refer to Volume II, page 376. Will the minister explain why there has been such a significant increase in the number of employees in the salary band over $100,000? There has been an increase in the number of employees in this salary band from 47 in 2008 to 68 in 2009.

The Hon. J.W. WEATHERILL: The number of employees within the Department for Environment and Heritage that received a remuneration package greater than $100,000 has increased by nine (from 59 to 68)—that is the change to which you are referring. The increase can be attributed to a yearly salary increase of 3.5 per cent, which has moved an additional 21 employees into the $100,000 to $109,000 bracket. During the 2008 year these employees' packages ranged from $82,700 to $99,500. Nine employees fell below the $100,000, mainly due to retirement, resignation or secondment.

The remuneration includes salary, employee superannuation costs, use of motor vehicles and value of long service leave accrual, in accordance with prescribed conditions and associated fringe benefits tax, but does not include any amounts payable due to TVSP arrangements. Remuneration is reported as a cost to the agency rather than a benefit to the employee, so the figures reported in the financial statements do not equate to the cash component of an employee's salary.

It is notable that the reporting threshold of employees has remained constant at $100,000 since the inception of accrual accounting from 1 July 1996, while salaries have risen between 3 and 4 per cent per annum during that period. Obviously, that sum of $100,000 has a very different relevance from when it was reported against in July 1996.

Mr WILLIAMS: I refer to the same reference. If I heard the answer to the previous question correctly, the salary increases have been of the order of 3.5 per cent. The total employee benefits expenses line on page 1702 of Volume V shows exactly a 3.5 per cent increase and indicates that the total employment in full-time equivalents in the agency has probably stayed exactly the same. How does the agency propose to meet Treasury's call to reduce significantly the employment numbers? Is the agency offering targeted voluntary separation packages or is it expecting to be able to meet the Treasury's targets simply by attrition? Also, can the minister bring back to the committee how many full time equivalents that would entail?

The Hon. J.W. WEATHERILL: The approach that is being taken across all agencies is that a certain value of savings has been identified for agencies, and a range of tools has been used to do that. Obviously, attempts have been made to economise, where possible, within the agency; but there has been, as part of the measures to be applied, the offering of TVSPs to a range of employees whose positions are no longer required. That certainly has occurred in all the agencies that I have responsibility for, including the Department of Water, Land and Biodiversity Conservation. I will supply to the member the precise detail of that target that will be established under that act. Certainly, all the agencies have certain savings targets and they also have certain targeted voluntary separation package targets. I will take that particular number on notice and bring it back to the member.

Mr GRIFFITHS: I move to public sector management issues and refer to Part C, State Finances and Related Matters, in the Auditor-General's Report, specifically at pages 48 and 49 which refer to targeted voluntary separation packages. The Auditor-General's Report states that as at the end of August 2009 agencies have reported making a total of 951 offers of TVSP and have received a total of 400 acceptances. Of those acceptances, can the minister confirm how many people were identified as being excess employees?

The Hon. J.W. WEATHERILL: I think they all, by definition, have to be, because they would not qualify as a saving and, indeed, I think it is consistent with the taxation requirements that they be excess positions so as to attract the concessional taxation treatment. So I think the answer is they all must be excess for the purposes of achieving the TVSP.

Mr GRIFFITHS: I probably should have qualified it a little bit better. During estimates committee questioning, 419 people were identified as being excess, I think, as at 30 June. It is that part of the public sector from which I am looking for an answer.

The Hon. J.W. WEATHERILL: We would have to take that on notice to find out which of that cohort were offered and accepted a TVSP.

Mr GRIFFITHS: As part of the process of doing this, surely of the 419 people identified as being part of that group there must have been a reasonable spread from across the many departments for which you as public sector management minister have responsibility. Therefore, was a principle taken that those people should be identified in the first instance as being a target of a voluntary separation package?

The Hon. J.W. WEATHERILL: The starting point is that I do not have direct responsibility for managing each surplus employee in the way in which I think the question implies. Nevertheless, I can help with the answer. Individual employees who are excess to requirements are managed by individual agencies, and how they do that is a matter for them. It may be that they were excess for a very short period and that the initial attempts would be about trying to find them alternative employment. So, they are not necessarily the cohort that would first be offered a TVSP. That is not to say that they were not or could not be, but it should not necessarily be assumed that these people have been in that cohort of people who are excess to requirements for an extended period of time.

The other issue is that excess employees are not obliged to accept any offer that is made. I do not know whether the Treasurer has already had his examination, but the administration of the TVSP program certainly sits within his province.

Mr GRIFFITHS: I understand that the Treasurer has final responsibility for this because it is a part of the Mid-Year Budget Review announcements that he made last year. However, some confusion has always existed in my mind about the question of the areas of the minister's responsibility as the public sector management minister—as to whether crossover occurs and the dialogue that happens to ensue—especially in this case with the 419 people who were identified as at 30 June accounting for some $30 million in recurrent labour costs of continuing employment.

When there is an identified need as part of the Mid-Year Budget Review and budgets that are put in place to reduce the cost and the numbers within the public sector, I would have thought that responsible management principles would demand that you cannot give a commitment that they would all accept it (I understand that; it has to be a voluntary decision), but there would be a process to ensure that those people would receive offers. Can the minister give a definitive statement as to whether these people have received offers?

The Hon. J.W. WEATHERILL: I cannot speak for every agency because I do not have that responsibility, but I can speak for DPC. In DPC's case, all the relevant people would have received offers of TVSPs, and it is likely that that would be the case in other agencies. So, the member should not take from my answer that all those particular employees have not received an offer: they may all have received an offer. I just cannot give the member that answer.

Mr GRIFFITHS: Continuing with the same reference, and still referring to the fact that the Auditor-General's statement refers to 400 TVSPs having been accepted, can the minister confirm what the cost was to that stage for those 400 acceptances?

The Hon. J.W. WEATHERILL: No. Once again, that is a matter that I will have to take on notice, or it could be directed to the Treasurer. However, I will certainly undertake through one of those methods to find the answer.

Mr GRIFFITHS: I will continue with the theme; hopefully, this is an area about which the minister has some knowledge. Is the minister aware that, where a TVSP is offered, normally there would be some payback period where after the separation occurring the budget is in a positive situation after the payment of that TVSP package. Can the minister define whether an average period is in place for all the 1,200 that are being sought?

The Hon. J.W. WEATHERILL: I think that is a question that would be best directed to the Treasurer.

Mr GRIFFITHS: My next question relates to public sector workforce data reports. I have previously asked the minister when we can expect the presentation of that report. My understanding is that it has not been presented for some two years. Is the minister able to provide the committee with the timing?

The Hon. J.W. WEATHERILL: I understand that the report is being progressively loaded onto the website. So, as elements of it are being completed it is being loaded onto the website of the Office for Ethical Standards and Professional Integrity. We are not waiting until all the data has been collated to present the report in a full form, it is being progressively put on the website, and I am advised that a substantial proportion of that data is already there. The report itself comprises a collection of data and as that data is being completed it is finding its way onto the website, and I direct the member to the website.

Mr GRIFFITHS: Does the minister have a final time line within which he expects it will be fully implemented?

The Hon. J.W. WEATHERILL: I am advised that it will be completed soon and that a substantial proportion of it is already there. However, I will try to get some clearer time lines.

The CHAIR: The time for the examination having expired, I declare the examination completed.

Progress reported; committee to sit again.


[Sitting suspended from 13:04 to 14:00]


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