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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2010-11-23 Daily Xml
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TRADE AND ECONOMIC DEVELOPMENT DEPARTMENT

Mr HAMILTON-SMITH (Waite) (15:41): I raise the question of the relocation of the Department of Trade and Economic Development from plush offices at Terrace Towers, 178 North Terrace, to even plusher offices in the Conservatory Building at Hindmarsh Square, located at 131-139 Grenfell Street. The development was a joint venture between the Hines Group Australia and Babcock & Brown. I have visited the building. The Hines family has done a great job with this development, but some serious questions need to be asked about the connection with Babcock & Brown and the Labor Party, and I am going to point to that issue.

The Department of Trade and Economic Development is now located in this new Conservatory complex. In 2002-03, Babcock & Brown donated amounts of around $34,500 to the Australian Labor Party, New South Wales branch, according to the Australian Electoral Commission website. In 2004-05, Babcock & Brown also donated an amount of $63,500 to the ALP, New South Wales.

It is here that the chronology gets interesting. The Conservatory was listed as a proposed major development in the Government Gazette in South Australia on 27 May 2004. The proposed development was for the construction of a 19 level residential apartment tower and podium (10 storeys high) containing 127 apartments, with ground and part first floor retail and office use, but in September 2005, the Government Gazette listed changes to the development as follows: the number of apartments was reduced from 124 to 72 and 'more commercial space is included with an increase from 832 metres squared to 3,600 metres squared'. That is in the context of this having been declared by the state government as a major project, thus facilitating planning expediency.

On 15 May 2006, after this decision, Babcock & Brown then donated an amount of $20,000 to the ALP South Australia. On 12 October 2006, Babcock & Brown donated amounts of $1,000 to the ALP South Australia, and in 2006-07, donations of around $20,000 to the ALP New South Wales.

Cabinet approval for the development in Hindmarsh Square was given in September 2008, contrary to information provided by the Treasurer this morning on ABC 891. A design architect was appointed in December 2008. The Public Works Committee heard about the proposal in May 2009.

The submission to the Public Works Committee stated that the total space to be fitted out would be 3,600 metres square. The Sustainable Budget Commission was announced by treasurer Kevin Foley on 4 June 2009. The Public Works Committee reported on the proposal on 16 June 2009 to parliament. The project was then tendered out in July and fit-out and construction occurred in August. This project could have been stopped.

Fit-out was completed in December 2009, and DTED occupied in late December/early January just prior to the state election. Since then 78 people have been sacked from DTED, reducing the number of people who can use this site. According to ALP Electoral Commission information, the total of Babcock & Brown donations to the ALP since 2002 are of the order of $271,000.

Some questions need answers, Madam Speaker. Why was it necessary for DTED staff to move at all? Having moved, is it costing more or less? My advice is that it is significantly more in rental at the new location and that, in fact, for Terrace Towers it was around $1.172 million per annum but for the Conservatory building it will be around $1.6 million in rent per annum, with a 4 per cent rent increase each year.

Is the department now being forced to sublet two of five levels it fitted out and has occupied? How did the Rann government deal with the potential conflicts with Babcock & Brown? Who approached who about increasing the commercial space? Why was the Conservatory chosen by DTED for relocation? Was the rental at a competitive market rate?

Was cabinet advised of the donations to the Labor Party? Who absented themselves from the decision? Why was the Public Works Committee not advised of the donations and the potential conflicts? Was any funding provided to the SA branch of the ALP from New South Wales or national headquarters prior to the state election? Has this matter been referred to the Auditor-General? This whole move of this department is questionable on costs, on process, on probity and on principle, and it warrants further investigation.

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