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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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Auditor-General's Report

AUDITOR-GENERAL'S REPORT

In committee.

The CHAIR: We now proceed to the examination of the Auditor-General's Report in relation to the Minister for Environment and Conservation, Minister for the River Murray and Minister for Water for 30 minutes. I remind members that the committee is in its normal session, so any questions to be asked must be done by members on their feet and all questions must be directly referenced to the Auditor-General's Report. Member for MacKillop.

Mr WILLIAMS: I refer the minister to the Auditor-General's Report, Part A at page 31, where it says:

discussions between representatives of the South Australian and Commonwealth Governments have progressed in a constructive manner and a mutually agreed position has been reached on the issue of reduced reliance on the Murray River.

For some time, I have been trying to get some detail of this mutually agreed position from the minister. The minister told me in estimates that the government's position is that it will not reduce the amount of water it pumps from the river—it will not reduce its licence—but it might pump less water in times of low flows.

Can the minister confirm whether those words printed on that page of the Auditor-General's Report, which apparently came from the Department of the Premier and Cabinet, actually mean that the commonwealth has signed off on the $228 million contribution towards the desalination plant in the knowledge that South Australia will not reduce its River Murray water licence for SA Water or critical human needs?

The Hon. P. CAICA: As the member quite rightly states, the audit reviewed certain aspects of the Adelaide desalination project, including the commonwealth funding high level project governance controls over procurement and other things, but the question specifically was in relation to the arrangements that have been brokered between the state and the commonwealth in respect to the $228 million payment for the expansion of the desalination plant from its original 50-gigalitre capacity per annum to 100 gigalitres. Of course, $100 million was provided for the first component and, in addition to that, $228 million, which (as I have advised the house previously), in the words of the commonwealth, is guaranteed.

Without meaning to disappoint the honourable member in any way, I can certainly advise him that we have put forward a proposal to the commonwealth in regard to what it sees as the requirements for that particular funding. I can advise that in our discussions to date there has not been a commitment to reduce the licence as it relates to SA Water, and I have said that previously. That is not to say, of course, that when the Murray-Darling Basin Plan eventually comes, all licence holders, in all likelihood, will be affected by that; but, for the purposes of this question with respect to the desalination plant, that has not been an issue and is not part of it.

I cannot give a specific answer at this point in time. The member will know that there were discussions that occurred prior to the election. We believed we had an arrangement in place at that time. There was a very close election, and the result was the nomination and swearing in of a new minister for water, my friend and colleague the Hon. Tony Burke. We are still working through those things, and I remain very confident that in the not too distant future this matter will be resolved.

I reinforce the point that there is no threat to the $228 million that is to be provided by the commonwealth. In addition to that, I expect the matter to be resolved very soon.

Mr WILLIAMS: I am now more confused than I was previously.

The Hon. P. Caica: I can't help that, Mitch.

Mr WILLIAMS: Well, I am sure you can.

The Hon. P. Caica interjecting:

Mr WILLIAMS: Well, it appears that the Department of the Premier and Cabinet has given these words to the Auditor-General: 'a mutually agreed position has been reached on the issue of reduced reliance on the River Murray'. Is that accurate, or not accurate?

The Hon. P. CAICA: I believe that the Auditor-General's manner in which he has described the circumstances is correct but, of course, the incoming minister and his people needed to fully understand the arrangement that has been the subject of previous discussions. There is no doubt, as I said earlier, that it will be resolved very soon. It was only as recently as late last week where I had some ongoing discussions about the timeliness of the decision-making process from the commonwealth's perspective. Again, I reinforce that the money is guaranteed. We believe that we have a landing spot, and that is reflected in the Auditor-General's comments in his report.

Mr WILLIAMS: I refer now to Part B, Volume 4, page 1446. I will read from the report:

Up to 2008 the net cash generated from operating activities was sufficient to cover the net cash used in investing activities (ie essentially the purchase of property, plant and equipment, etc), but insufficient to pay the level of dividend and return of capital required by DTF. To meet its payment obligations to government and finance its capital works programs the Corporation's net increase in borrowings has risen significantly since 2007.

The Auditor-General has been pleading this position for a number of years now, and I see that the debt to asset ratio percentage has reached 24 per cent (up from some 17 per cent only two years ago). How much further will SA Water be used to underpin the Treasurer's failing budgets?

The Hon. P. CAICA: I thank the honourable member for his question. Of course, the Auditor-General's Report for 2010 does comment on page 1446, as mentioned, regarding this efficiency of the corporation's net cash inflows in converting both the corporation's investing activities and the very important point of dividend payments to government.

SA Water operates in accordance with a financial ownership framework that was approved by cabinet in March 2005. This framework was developed by the Department of Treasury and Finance and benchmarked importantly against other similar water utilities. It is important to note that the framework's dividend policy requires SA Water to distribute to government 95 per cent of profit after tax. The dividend distribution is only made after deducting from revenues the operating expenditure necessary to maintain assets and to manage the business. This includes funds to service any borrowings and to meet taxation obligations.

The government has set a borrowing target for the corporation with a debt to asset (or gearing) ratio of 20 per cent, with a permitted range of 15 to 25 per cent. Overall, the corporation's actual results for the years 2006 through to 2010 show the debt to asset ratio to be within that range that has been set by cabinet. However, the Auditor-General's analysis does not distinguish between investing to maintain the corporation's current asset base, which is logically covered by the revenue generated by current assets each year, and the need for SA Water to invest in new assets to cater for growth or to improve the reliability of South Australia's water supply.

New assets need to be financed up-front by the corporation with revenues to recoup the cost of those assets only being provided once those assets are in place. As the Auditor-General's analysis shows us on page 1446, cash outlays from investment activities have increased from $106 million in 2006 to $1,140 million in 2010. Most of this expenditure in the last two years is directed towards new assets, importantly the Adelaide Desalination Plant.

In the previous three years, 2006 through to 2008, approximately just over half was directed towards new assets. I might also add that there are other assets that are being managed through this process, not just the Adelaide Desalination Plant; but that makes up a significant component.

SA Water's investment in infrastructure is a vital element of underwriting economic growth; however, we need to note that there will always be a lag between the initial investment by SA Water and the resulting revenue stream from customers which needs to be financed by borrowings.

Mr WILLIAMS: I turn to the next page, with regard to the desalination project. It states that the target for the first water has been moved from December 2010 to April 2011 and that the major reason for this change is the impact of the fatal accident in July 2010. Can the minister guarantee that first water will, indeed, be delivered in April 2011; that is, is there no risk of a further blowout in the delivery time of the project? Does the government still maintain that the major reason for the change in delivery time is the fatal accident which occurred in July 2010, and that the time between the fatal accident and when the delay was reported was much less than the four-month delay which has now been reported?

The Hon. P. CAICA: Whilst you always go out on a limb in respect of the guarantees that can be provided, I am certainly advised that SA Water is confident that the first drop of water at the desalination plant will be produced in April, and I can only go on that advice. That is what has been reported to me.

I think it is very unfortunate—and this is no way being disrespectful to the Auditor-General—to state that because, when you read it, it seems that the entire delay is as a result of that tragic fatality at the desalination plant. There is no doubt that the site was closed down for an extended period. Parts of the site that were critical to the construction were closed down for a period of time. As you yourself would understand, Mitch, it is not just that component that was closed down, that then has a cascading effect with respect to other matters required to be part of that construction; that is, they are linked. So, a three-week closure in regard to that section of the site, for example, has an impact on other parts of the operation because of the connectedness of that operation in its entirety.

The other point I would make in regard to the delay is that there will be a short close-down period over Christmas. I think it is also important to note that there has been a lot of comment in regard to the desalination plant in the media with respect to certain aspects of the operations down there—quite unfounded assertions, I might add.

Quite clearly, if it takes a bit longer to get the construction completed as a result of safety concerns, so be it. Certainly, when I have been down there, one of the first issues I raise with people is their safety record. It had been quite an outstanding safety record up until that tragic circumstance, and we have had some lost time injuries since that particular time.

If it takes a bit longer to make sure that we review the circumstances in which the consortium operates down there, I support that. So, I am not fussed about the date on which the first water is provided. On the advice I have received, I am confident that it will reach the milestone of April that has now been reset. I think the approach that will be taken by everyone in this house, and even outside this house, is that safety is paramount.

Concerns have been raised, some of which I would say were promoted through the media in such a way that they cannot necessarily be evidenced. However, notwithstanding that, it is appropriate to sit back and review the way in which you are doing things to make sure that we do have all those measures in place that ensure that there is the proper and appropriate approach to safety at what is a very congested worksite.

I am sure that the honourable member has been down there. If he has not, I issue an invitation to him to come down. I would be delighted to host the honourable member so that he can look at the operations down there. It is a significant project in the context of projects that are being conducted in South Australia. It is a very busy site; and, of course, for a certain period of time, we had an extremely good record with respect to safety issues.

We have had some lost-time injuries but, in the main, the majority of those people have returned back to work, with one still off work, as I understand it. I will correct that if I am wrong, but that is as I understand it. A couple of other workers have been returned to alternative and lighter duties.

Really, in regard to the honourable member's question, yes, April is the date that we are still confident we will reach. There has been a delay. There have been circumstances surrounding that delay, not the least of which is our ongoing approach to ensure that there is an appropriate adherence to and focus on safety at that very busy worksite.

Mr WILLIAMS: I draw the minister's attention to page 1448. Under the heading 'Metropolitan Adelaide Service Delivery Project', the Auditor-General's Report states:

On 19 October 2009 cabinet approved the contracting strategy to replace the Adelaide Water Contract.

The fourth dot point states that included in that approval was the 'return of some strategic activities back to the corporation'. Minister, could you detail to the committee what strategic activities will revert back to the corporation?

The Hon. P. CAICA: I thank the deputy leader for his question. He is quite right. Just to put it in context, in 1995 the corporation and United Water entered into an agreement for the management, operation and maintenance of Adelaide's water and wastewater systems. That was referred to as the Adelaide Water Contract. This agreement commenced on 1 January 1996 and will expire on 30 June 2011.

Again, the deputy leader highlights amongst other things, but in particular, the comment in the Auditor-General's Report of a 'return of some strategic activities back to the corporation'. I can advise him that, in the main, the call centre will be returned to operations, as well as the cathodic protection of assets and, indeed, certain aspects of the capital management of the operations.

I think that, in the context of the new contract, it is very wise to review what it is that SA Water has the capacity to do internally, and that is what has been undertaken by the corporation.

Mr WILLIAMS: I now draw the minister's attention to page 1442. Minister, there is a series of dot points, but the second dot point coming down the page talks about the factors affecting water and wastewater charges, or increase in revenues. The last sentence states, 'The increase since that time,' and I think that we are talking November 2006, 'is attributable mainly to price increases and growth in customer numbers'.

Am I right in assuming that the growth in customer numbers increases the revenues because of the fixed charge within the water price, and can the minister detail to us what that equates to in dollar terms, that is, the total revenue attributable to that?

The Hon. P. CAICA: I am advised that the answer is yes, but that applies not just to the fixed component but also to newly-contracted sites; and we hope that more houses will be built in the future that, of course, will be connected to and supplied by SA Water. In regard to the specific figures that you asked about in terms of the monetary return (I think that was the thrust of the question), I do not have those in front of me, but I am happy to give them to you and we will get back to you with them in a very short period of time.

Mr WILLIAMS: Towards the bottom of the same page it talks about expenses, and that 'other expenses' decreased by $7 million. There is a list of factors contributing to the change, and one of them is an increase in accommodation costs of $4 million. Is that directly attributable to the move of SA Water's offices into the new building in Victoria Square?

The Hon. P. CAICA: The answer, in the main, is yes, of course, but I do not want to leave it just at that; I want to clarify a few things. Most of it is with respect to the new building, but in addition we also have extra staff, particularly extra staff who were employed during what was the most unprecedented drought in anyone's living memory. Both contractual and other staff were put on during that time managing water restrictions and the like.

So there was that extra staff, but a significant component of that increase also relates to the transfer of the labs that were formerly at Bolivar—and I am sure you would have seen those—to the head office. Of course, we did not pay any rent at Bolivar because we own the property, but the most appropriate place for those labs is at headquarters. There is that component as well, Mitch. It really was the consolidation of some of the operations out there that increased the number of personnel at a single point, and that included the additional staff that were, I am advised, put on as a result of the drought we experienced.

Mr WILLIAMS: You have led me directly to another question, minister. You talk about the extra staff who were put on because of the drought; I think I asked a question of your predecessor in estimates last year about whether the extra staff put on for the drought were temporary or permanent and, from memory, the answer was that their employment was of a contract or temporary nature. Have those staff been relinquished or are they still employed by the government?

The Hon. P. CAICA: I thank the deputy leader for his question. The answer is no, at this point in time, but that will occur; there will be a reduction in those staffing levels at the time of the easing or lifting of restrictions. There will also be other staff who have been contracted who will wind up, and that is in the context of the capital program we have in place. So, they are still on the books at the moment but, come 1 December and beyond, that number will be reduced.

Mr WILLIAMS: At the bottom of the same page it says that further losses of $12 million are due to losses on interest rate swap derivatives and foreign exchange transactions. Can you explain what interest rate swap derivatives SA Water has been involved in, and what foreign exchange transactions it has been involved in?

The Hon. P. CAICA: I thank the deputy leader for his question. There is one foreign exchange in place, and I am advised that relates to the ADP. In regard to the interest, I guess it is safe to say that the last I remember we did have a significant event that created a problem in regard to the interest rates that anyone was able to accrue during that period of time. I do not know how your significant investments went, but if you did better than most you still probably did not do that well. The point is that SAFA organises and manages that on behalf of SA Water under the permitted instruments policy.

Mr WILLIAMS: With regard to the foreign exchange transactions associated with the ADP, how did the loss eventuate with regard to that? Was that a hedging exercise and were funds put into some foreign currency to meet commitments in that foreign currency?

The Hon. P. CAICA: I will get back to you on that specific question. I certainly would expect that everything has been done in accordance with the appropriate measures and policies that exist, but I will get back to you, as I always do, in a most timely fashion to answer the specifics of that question.

Mr WILLIAMS: I now refer the minister to Volume 5 of Part B of the Auditor-General's Report: the Living Murray Initiative. There are a number of items or notations where money was paid from the South Australian government to the Victorian government as part of the Living Murray Initiative. There was $4.1 million in 2006-07, $3.6 million in 2007-08 and $3.6 million in 2008-09, so some time ago.

I note with interest that the Victorian Auditor-General has been very scathing about the projects in Victoria that have been funded by the Victorian government, which were supposed to achieve significant water savings, but the Victorian Auditor-General has suggested in a number of reports that those savings were, at best, illusory. Have audits been conducted on the projects that were funded with the aid of South Australian taxpayers' dollars, and how much water has been recovered by the expenditure of some $11.3 million of South Australian taxpayers' money in Victoria?

The Hon. P. CAICA: We cannot make any comment on the views held and expressed by the Victorian auditor-general because we are not—

Mr Williams interjecting:

The Hon. P. CAICA: No, I know that. I am just making the point that, irrespective of the fact that the auditor-general has made that comment, I look at the operations in Victoria and think there are probably significant savings to be made, and I do not know what commitment they gave with respect to the level of water savings that they were going to make. However, we do know that it has been very difficult in South Australia to accrue a deal of money from the commonwealth based on the fact that, as you know and as we all know in this chamber—and the member for Chaffey would certainly attest to this—as early adopters of advanced techniques in irrigation, we are, in the main, efficient users in regard to the way in which we apply our water from an irrigation perspective.

So, it has been very difficult for us to deliver the level of savings that made it attractive to the commonwealth to actually invest money in South Australia for that particular purpose. Those discussions with the commonwealth are still ongoing, because we know there is $105 million, or thereabouts, available for private irrigation projects.

Mr Williams interjecting:

The Hon. P. CAICA: In Victoria? The money ought to have been spent in Victoria. As I said, I cannot make any comment on what has happened in Victoria.

Mr Williams interjecting:

The Hon. P. CAICA: In respect to the projects, some are still to be completed. We know that there was also some money that was provided for the replacement or relocation of a pumping station. That really fell out of the criteria, but we were able to do that anyway and deliver a small amount of savings on that. Certainly, the proponents of the project are required to provide to the commonwealth that water that can be saved and, to a certain extent, I would not just presume but know that the commonwealth would be seeking what they would say is the return on their investment and, from our South Australian perspective, we would certainly be helping our irrigators here in any way we can to meet the savings that are required. I would also say, and you would be aware of this: South Australia was the first state to reach its targets under the Living Murray project.

Mr Williams: How can you say that when you haven't audited the money that you spent?

The Hon. P. CAICA: We have delivered 35 gigalitres through our commitment—the first state to do so.

The CHAIR: Minister, sorry to be rude, but your time has sort of expired.

The Hon. P. CAICA: Do I have to stop now, Madam Chair?

The CHAIR: If you would like to finish answering your question—

The Hon. P. CAICA: Yes, I will. What we would like is a bipartisan approach from the opposition with respect to assisting us in engaging the commonwealth in such a way that we are able to extract more money from them in regard to projects that are going to deliver savings of water to the Murray-Darling Basin system. I thank the deputy leader for his very mature approach to this Auditor-General's Report hearing.

The CHAIR: We now proceed to examination of the Auditor-General's Report in relation to the Minister for Aboriginal Affairs and Reconciliation, the Minister for Multicultural Affairs, the Minister for Youth and the Minister for Volunteers for 30 minutes. I remind members that the committee is in its normal session, so any questions have to be asked by members on their feet and all questions must be directly referenced to the Auditor-General's Report.

Mrs REDMOND: I would like to ask a couple of questions in relation to the multicultural affairs portfolio. Referring to Volume 1, on page 131, towards the very bottom, under 'Grants and subsidies', at about the third line from the bottom, there is just a slight reduction in grants by Multicultural SA of, as I calculate it, about $32,000 per annum, and then over the page there seems to be an increase of about $36,000 to grants and subsidies provided to entities within the SA government.

To my untrained eye, that looks as though the government is simply not giving money out to the multicultural communities but keeping it for itself and just shuffling the money from one pocket to another. Can the minister explain why the one grant by Multicultural SA has gone down by almost the same amount as the grants to entities within the government have gone up?

The Hon. G. PORTOLESI: I am advised that there is no link between the two. The decrease in grant payments from $864,000 in 2008-09 to $832,000 in 2009-10 includes a decrease of about $27,000 for payments made under the ethnic community organisation's Land Tax Relief Grant Scheme. You are aware of that, I believe, because I think we talked about it during estimates. The grants up, on the next page, we believe is as a result of our increased funding to Carnevale.

Mrs REDMOND: On the bottom of page 138 is a list of those people who are members of the South Australian Multicultural and Ethnic Affairs Commission. Can the minister advise what fees are paid to those people and how often the commission meets?

The Hon. G. PORTOLESI: I am advised that the commission meets about eight times per year and that the sitting fees are about $3,600 per year.

Mrs REDMOND: I refer to page 118. At the very top of page 118, column 2 refers to Multicultural and Ethnic Affairs. Under 'current assets' there is a provision for receivables and also lease incentive receivables, and then further down there is a liability. Both of those figures have changed. Can the minister explain what are these lease incentive receivables and liabilities and why do they vary from year to year?

The Hon. G. PORTOLESI: We are not 100 per cent certain, so I would prefer to take that on notice, if I can, and get back to you.

Mrs REDMOND: I just love the fact that we get half an hour to question you, and you have got advisers who are paid a fortune to be here for hours and hours waiting for these things, and we cannot get answers. It is just like estimates.

The Hon. G. PORTOLESI: We can argue about this, but that would achieve absolutely nothing. We can make productive use of this time. It would be preferable if you did not attack the public servants who are here.

Mrs REDMOND: I am not attacking the public servants. I constantly complain about the fact that they have to spend so much of their time being prepared for meetings like this, when we do not get answers anyway, so why not find a better system to do it?

The Hon. G. PORTOLESI: I am offering you an answer, but just not right now. You will get a detailed, responsible answer.

Mrs REDMOND: That is the whole point of having the well paid advisers here. I am in no way attacking the advisers; I am simply saying there has to be a better system.

Mr Kenyon interjecting:

The CHAIR: Thank you, member for Newland.

Mrs REDMOND: The member for Newland—you can hardly see his little head sticking up over there.

The CHAIR: Okay, 25 minutes left on the clock.

Mrs REDMOND: In relation to the income shown on page 115, can I first ask about the expenses? For the supplies and services, the expenses have increased. Can I have an explanation as to why the supplies and services have increased but there has been a significant reduction in the expenses of, and therefore the payments of, grants and subsidies overall?

The Hon. G. PORTOLESI: Are you referring to program 2?

Mrs REDMOND: Program 2 on page 115, at the very top of the page is 'expenses' and, over to program 2, we have supplies and services. They seem to me to have gone from $1,351,000 down to just over $1 million. I am curious because you are either employing more people or paying them more, according to the figure, but the supplies and services are lower.

The Hon. G. PORTOLESI: We suspect that there are some one-off costs in 2008-09, but we will confirm what they are. We think that is what it is, but we will confirm what they are.

Mrs REDMOND: About half a dozen lines further down under 'income' and 'recoveries', can you explain what the recoveries are and why they have gone down from $71,000 last year to $26,000 this year?

The Hon. G. PORTOLESI: We think that might be in relation to managing MSA, that is, managing ticket revenue for a particular community group. So we did it in one year but not in the other. However, to be certain, we will confirm that for you.

Mrs REDMOND: Referring to page 130 of the report, there is a combined total of remuneration of employees—as to how many are on various bands going from $100,000 up to $479,999. Can the minister advise how many employees in multicultural affairs were paid in any of those bands, that is, above $100,000? Can you also advise whether any of your staff in multicultural affairs is paid in excess of the standard 9 per cent superannuation?

The Hon. G. PORTOLESI: There is one employee of MSA for 2009-10 who received remuneration of greater than $100,000. Can you ask your question again about my ministerial staff?

Mrs REDMOND: The question was simply: how many were in—

The Hon. G. PORTOLESI: One.

Mrs REDMOND: So there is only one; that is fine. Do any ministerial staff in multicultural affairs receive more than the standard 9 per cent superannuation?

The CHAIR: Can I clarify something, leader? You are referring to page 130 in relation to remuneration of employees. Does that include political staff?

Mrs REDMOND: I am asking specifically about the ministerial staff on multicultural affairs.

The CHAIR: So they would be included in this table, would they?

Mrs REDMOND: I assume so.

The Hon. G. PORTOLESI: Can I clarify? When you say ministerial staff in MSA, I presume that you mean MSA staff who are located in my office. Is that what you mean?

Mrs REDMOND: Yes.

The Hon. G. PORTOLESI: There is only one of them, and that is an MLO, and I am not familiar with the terms and conditions of his employment. We can confirm that, if you like. Is that what you meant?

Mrs REDMOND: Yes.

The CHAIR: Member for Morphett.

The Hon. G. PORTOLESI: Are we now moving to Aboriginal affairs?

The CHAIR: Yes.

Dr McFETRIDGE: I refer to Part B, Volume 3, page 968, Aboriginal community assistance grants, which have dropped from $4.231 million down to $1.873 million—a very significant drop. Can you give us some reasons for that?

The Hon. G. PORTOLESI: Yes, you are correct. The higher expenditure for this line in 2008-09 compared with 2009-10 mainly reflects $2.253 million of once-off payments for the establishment of a Port Augusta rehab centre and for the To Break the Cycle program. It is a one-off payment.

Dr McFETRIDGE: Same page and reference, the Anangu Pitjantjatjara operating grant has gone up slightly from $1.24 million to $1.326 million. How much of that operating grant has been spent on legal services in the past? Do you have any idea about that? You could take it on notice.

The Hon. G. PORTOLESI: We will need to take that on notice.

Dr McFETRIDGE: The reason I ask that is that I understand that there has been a significant change in the provision of legal services on the lands and that a Queensland firm is now going to provide legal services. A fellow called Phillip Toyne has been giving advice. Does he have a practising certificate and professional indemnity insurance for South Australia?

The Hon. G. PORTOLESI: Can I undertake to get you some information in relation to that? That is an issue that is managed by the APY executive. I met Phillip Toyne when I was on the lands the first time, and I think he is a fully-fledged, properly qualified lawyer. He is highly respected. He was involved in 1981 in the land rights campaign, and I know that he is someone they respect enormously. As a matter of fact, I was meeting with representatives of the APY executive today. In order to get it right, we will get a response to you, but he is a serious person in the legal field.

Dr McFETRIDGE: The reason I ask that is that he seems to have given them contrary advice to Mr Ron Merkel QC, who is a very well-credentialled legal adviser. Mr Toyne's advice was for the APY executive to accept changes to the permit system where they would not be charging for permits onto the APY lands and so there would be a significant reduction in income for the APY executive, which then affects the flexibility in their operating grants back here.

The Hon. G. PORTOLESI: Again, they are the affairs of the APY executive. I cannot comment on that. I am not privy to the advice that Ron Merkel has provided. I am familiar with the issue around the permits, and we believe that we have successfully resolved that. I take your point; it is an explanation. But I cannot comment on the diverse legal advice.

Dr McFETRIDGE: That same reference, I understand that, regarding the reduction in income from the permit system, one of the Aboriginal advisers, Kim Petersen, said that the government would pick up the tab for any lost income, which seems to be at complete odds with what is happening elsewhere where a user-pays system is being put in by the government—in every area of government, including biosecurity. Every area of government is now user pays, but why would the government want to pick up the tab on something that was already paid for by individuals as user pays?

The Hon. G. PORTOLESI: I cannot comment on the comments that you report Kim Peterson, who is one of my directors, has made in relation to the revenue collected, or not, as a result of the permit scheme. I will need to check my records, but I do not think this was raised as an issue during my visits and in all the discussions that I had with members of the APY executive. I could be wrong, but it is a bit of a surprise to me. Again, I cannot vouch for what Kim Peterson has said, but we can provide a briefing or some information for you about the revenue impact of the change.

Dr McFETRIDGE: It just seems strange. I have a lot of respect for Kim, but it seems a strange thing for her to do.

The Hon. G. PORTOLESI: I will get back to you, but if you are able to give me some more information about the context of the discussion, that will enable my answer to you to be more meaningful. It is just that I do not want to waste my officers' time chasing conversations that may or may not have happened. I know that you do not want to do that, so if you can give me some information, either here or in another place, I am happy to follow it up.

Dr McFETRIDGE: I am happy to do so, minister. I think it is in the minutes of the APY executive meetings as well. It may not be; I will have to check on that but, certainly, my information is pretty good. We will go straight back on to some other funding, some more straightforward material. I refer to page 969, funding for the South Australian Aboriginal Sports and Training Academy of $769,000. Can you give the committee an outline on what that has been spent on?

The Hon. G. PORTOLESI: I am advised that we provide a grant to SAASTA. My advice is that it is run by Education. I am familiar with some of its work through its involvement with the Power Cup, for instance. I am aware of the work it does in our schools, where we have a significant number of Aboriginal kids or kids of Aboriginal heritage. Let me get you a decent briefing on that issue. But we do not run that program.

Dr McFETRIDGE: It is a terrific program out at the Para West campus. I refer to the same page, 969. Can the minister explain the difference between the $2.63 million for Aboriginal communities essential services in 2009 and the $344,000—an almost $2.6 million drop—in 2010?

The Hon. G. PORTOLESI: The Aboriginal communities essential services assistance is an expenditure line that is a consolidation of all grants to Aboriginal communities and organisations for operating and maintaining community infrastructure. In 2008-09, ARD, my department, entered into a grant agreement with an external service provider—Regional Anangu Services—to manage and operate the power stations on the APY lands, including the central power station at Umuwa.

Dr McFETRIDGE: How is the solar power station going? You do not have to answer that now. In the same reference, page 968, grants and subsidies within the Department of the Premier and Cabinet. In 2009, there were 80 consultants engaged by the Department of the Premier and Cabinet at a cost of $1.784 million. In 2010, 93 consultants were engaged at $2.322 million. How many of these consultants were employed for matters relating to Aboriginal affairs and what was the cost involved?

The Hon. G. PORTOLESI: I am sure that the honourable member would appreciate that we need to take that question on notice.

Dr McFETRIDGE: I refer to the same page, page 968, and 'Grants and subsidies' within the Department of the Premier and Cabinet. Funding to the arts is provided under the Arts Centre Grants—I am just trying to find the reference here. How much of the funding is provided to arts centres on the APY lands?

The Hon. G. PORTOLESI: I am unclear—which line is the honourable member referring to?

Dr McFETRIDGE: I refer to 'Art Gallery Board Operating Grants' and 'Country Arts Operating Grants'. There is about $15 million there.

The Hon. G. PORTOLESI: And your question is: how much is provided to arts on the APY lands?

Dr McFETRIDGE: Yes.

The Hon. G. PORTOLESI: We will need to get back to the honourable member about that. I will add to that. We do support the art centres on the lands in various ways. I would be surprised, but I might be wrong, if any direct assistance would be coming out of those two lines. I could be wrong, but that is just my initial response.

Dr McFETRIDGE: Just back to that APY Operating Grant, did the minister approve the increase of APY sitting fees and working on business for the APY for members of the executive to $350 a day?

The Hon. G. PORTOLESI: What page is the honourable member referring to?

Dr McFETRIDGE: That is page 968, 'APY Operating Grant'. There has been an increase in the daily payments for members of the APY executive to $350 a day—not just for meetings but for working on APY business. I understand that their week in Adelaide has cost $22,000 plus travel.

The Hon. G. PORTOLESI: I can see the line in relation to the APY Operating Grant; I cannot see the information you are referring to in relation to the sitting fees, and neither can the Chair.

Dr McFETRIDGE: My information is that APY executive members have received an increase in their sitting fee to $350 a day coming out of that grant. Is my information correct and, if so, I would have thought that the minister would have had to approve that increase.

The CHAIR: Member for Morphett, as you well know, we are in the Auditor-General's Report and those figures are just not referred to here. Perhaps, through goodwill and goodwill alone, the minister could seek to provide advice on that, but she does not need to answer this.

The Hon. G. PORTOLESI: Thank you. I am more than happy to seek an answer to that. I have to say that, again, that does not ring a bell with me. There is lots of communication about lots of things that often involve money. It does not ring a bell with the head of my department, either; but, in the spirit of good faith, we will get back to the honourable member.

Dr McFETRIDGE: I also have a couple more questions here on youth. Does the minister want to change advisers very quickly? Then the member for Kavel would like to ask a couple of questions. I have just one question here. I refer to the Auditor-General's Report, Volume 1, page 100. I am quoting here from a question I have been given, namely, that audit also identified that the new FMCP (the Financial Management Compliance Plan) templates were not finalised during the year for transferred functions for the Office for Youth. When will the Office for Youth FMCPs be implemented?

The Hon. G. PORTOLESI: Yes, I am aware of this. The honourable member is quite right: the Auditor-General did note that the new Financial Management Compliance Plan templates were not finalised during the year for transferred functions associated with the Office for Youth. The matter has been addressed, and the Financial Management Compliance Program for the Office for Youth was completed for the period ended 30 June 2010. The honourable member would be aware that the Office for Youth transferred to ADG during 2009-10.

Mr GOLDSWORTHY: I have some questions regarding the Office for Volunteers. I refer to the Auditor-General's Report, Volume 1, page 130, Remuneration of Employees. How many employees in the Office for Volunteers receive remuneration over $100,000, and how does that compare with the 2009 figures?

The Hon. G. PORTOLESI: In 2009-10, two employees in the Office for Volunteers received remuneration greater than $100,000, and it was the same for 2008-09. There is one executive officer in the Office for Volunteers.

Mr GOLDSWORTHY: I move to page 131, under the heading of Supplies and Services. Under Promotions and Publications, $1.436 million was spent in 2009, increasing to $2.125 million in 2010. Does that figure include any advertising costs to promote volunteering in this state?

The Hon. G. PORTOLESI: I am advised that it does, although we do not have the breakdown handy.

Mr GOLDSWORTHY: Similar to a question I asked in estimates, and still under the heading of Promotions and Publications, does the government intend to continue its television advertising to promote volunteering in this state? If so, can the minister provide the dollar amount allocated to that.

The Hon. G. PORTOLESI: My advice is the same as it was during estimates. I think there was an allocation in previous years of about $20,000, but I am yet to make a decision about the future.

Mr GOLDSWORTHY: On the same page, under the Grants and Subsidies heading, in 2010 an amount of $3.29 million is listed under 'Grants by: Other.' Does that figure include grants provided by the state government for volunteering?

The Hon. G. PORTOLESI: We suspect it does because the Office for Volunteers is not listed, as the other offices are, and we suspect that is because they are probably smallish grants. I am advised that it does.

The CHAIR: We now proceed to examination of the Auditor-General's Report in relation to the Minister for Police, Minister for Emergency Services and Minister for Recreation, Sport and Racing for 30 minutes. I remind members that the committee is in its normal session, so any questions have to be asked by members on their feet and all questions must be directly referenced to the Auditor-General's Report.

Mr GOLDSWORTHY: As I indicated, the first period of questioning will be in relation to police. I refer to page 8 of the appendix to Volume 5 of the Auditor-General's Report where it lists under Salaries and Allowances the Commissioner of Police. It shows the police commissioner was paid $381,281 in 2009-10, yet the budget was only $271,000, some $110,281 less than the actual expenditure. Will the minister explain the reason for this?

The Hon. M.J. WRIGHT: We do not have those numbers in front of us, so I will get some more detail for you, but the information that I have been provided here and now may well help explain some of that figure. I think the shadow minister referred to the budgeted figure being about $271,000 and the commissioner's—

Mr Goldsworthy: I can show you; it is right here.

The Hon. M.J. WRIGHT: I will still need to get the detail for you, but I can give you some of the detail now. I am not doubting the figures, by the way. The shadow minister referred to the commissioner's salary in 2009-10 as being $381,281. The information that I have been provided is that there were 27 pays, and the advice I have received is that some of this could be taken into account by things such as salary sacrifice, payroll tax, FBT, superannuation and long service leave, but I will get a more detailed prescriptive answer for the shadow minister. As I said, the advice I have received is that some of those items that I referred to may account for some of that difference that the shadow minister referred to.

Mr GOLDSWORTHY: I refer Volume 3 of the Auditor-General's Report, page 1051, under the heading of Management of Annual Leave Entitlements, which states:

No employee should have more than one year's recreation leave outstanding at the end of a service year without appropriate approval.

How many SAPOL employees have a recreation leave balance of over a year?

The Hon. M.J. WRIGHT: I thank the shadow minister again for his question. I can get the specific number for him but I think he will be pleased to know that, in response to this issue, SAPOL has taken steps to implement procedures to ensure that police officers and employees comply with Commissioner's Standard 3.4: take annual leave when due and only apply for the approval of annual leave carried forward in exceptional circumstances. So, procedures have been put in place and I will get that specific number for the shadow minister.

Mr GOLDSWORTHY: You may not be able to answer this question, minister, so you may need to take it on notice as well. Referring to the same issue under the same heading, how many of those had received approval at the point where they exceeded the allowable leave balance?

The Hon. M.J. WRIGHT: Once again, I will get that detail for the shadow minister.

Mr GOLDSWORTHY: Again, you may need to do the same with this question: what is the total balance of that excessive leave in terms of numbers?

The Hon. M.J. WRIGHT: Yes; I will need to take that one on notice and I will get back to the shadow minister.

Mr GOLDSWORTHY: I refer to page 1055 under the heading 'Expiation fees'. Since 2002 the current Labor government has collected $527 million in expiation revenue. SAPOL's reasons for variations in the level of the revenue include the number and type of speed detection devices and driver behaviour in response to road safety strategies. Meanwhile expiation revenue was $76 million in 2008, 2009 and 2010. This may suggest that either the road safety strategies have been insufficient or that any decrease in revenue eventuating from positive driver responses has been subsidised by an increase in speed detection devices.

The recent budget included measures to increase expiation revenue by $44.8 million. The question, minister, is: will you concede that any improvement in road safety and improved driver behaviour eventuating in less expiation revenue will be met or offset with measures purely designed to bolster expiation revenue and bridge that gap or make up the difference? To put it another way, irrespective of any improvement in driver behaviour, the government is still trying to increase its revenue via expiation notices.

The Hon. M.J. WRIGHT: No, I cannot agree with that at all and I do not think that is a fair analysis to make. Any government, whether it be on this side of the house or on your side of the house, does have an ambition to improve road safety and to improve driver behaviour. For us—and in a spirit of bipartisanship, I think the opposition would have had a similar philosophy when they were last in government—what we are about is getting the balance right.

There has been an emphasis on road safety. That is not to say that there was not with the previous Liberal government as well, because I think we always endeavour to improve when it comes to road safety. We do that through a variety of measures. There obviously has to be a balance between speed detection, improvements to infrastructure and improvements to education, and driver behaviour needs to improve. I do not accept the last comment or statement made by the shadow minister. We would be extremely keen as a government for our revenues from speed detection to go downwards.

Of course, the people who have the responsibility are the people who are behind the driver's wheel. I suppose I can look back to the time when we first came to government in 2002. For about the first two and a bit years, I was the minister for transport. We introduced a range of road safety measures and I know that the current minister has also put in place a number of strategies, including significant increases to infrastructure.

As a parliament, we still need to strive to improve road safety. The number of deaths on our roads is too high. The number of deaths, in particular in country South Australia, is far too high. I think we always need to be ambitious when it comes to road safety. Our preference would be for the revenue received from speeding fines to go down, not to go up.

Mr GOLDSWORTHY: I understand the minister's answer, but the budget shows that you are forecasting an increase in expenditure revenue by $44.8 million. I understand what you are saying, but I do not think the budget does not reflect that.

The Hon. M.J. WRIGHT: As I say, I can only answer it in part by saying our preference would be not to collect that revenue. There are 20 additional fixed cameras over four years, there is a rail safety program, and a variety of measures have been put in place. The best news for this government—and I think the opposition would endorse this—is that, despite the fact that we have budgeted for that revenue, wouldn't it be great news if we did not get it? Wouldn't it be great news if we did not get that revenue? That would mean that more and more people out there on country roads in South Australia, but also in metropolitan South Australia, are doing the right thing. If they do the right thing, surely that is going to increase the chances of our road toll going downwards, which we are all, of course, very ambitious about.

Mr GOLDSWORTHY: Of course everyone wants the road toll to come down. The budget reflects that $44.8 million increase, so you cannot have it both ways, minister. The question then arises: is the government's road safety message not getting through?

The Hon. M.J. WRIGHT: I think we need to continue to work hard. We all have a responsibility. I think that, in part, our road safety message is getting through. Obviously, that is largely the responsibility of the road safety minister, who is doing great job, but of course we all collectively have a responsibility in that area, whether it be me, as Minister for Police, or the Minister for Transport. We take it very seriously, as I know the opposition does, too.

My advice is that we did not collect what we budgeted for last year, when we are comparing like with like, from speeding fines. I reiterate that the best message that we can deliver is one that turns around people's attitude to their driving habits and makes sure that they are not breaking the law, and that has to be a good thing.

In regards to the specific question, I think we are doing a good job, but it does not mean to say that we cannot improve. Obviously, the Road Safety Council, superbly chaired by Sir Eric Neal, is fulfilling a very important capacity. This is an ongoing challenge worldwide and in every state around Australia. We have seen the numbers go up and down. We really need to continue to work hard to force those numbers down.

Mr GOLDSWORTHY: Going onto page 1052, under the heading 'Highlights of the financial statements' I note the employee benefits expenses have increased in 2010 by $7 million. Can you explain the reasons for that increase?

The Hon. M.J. WRIGHT: It is reflected by two items: first, the increase in salary and wage costs, which is approximately $21.8 million, and that mainly reflects enterprise bargaining and additional police on during Recruit 400; and, secondly, the reduction in the workers compensation provision, which is $13.384 million. As depicted, it reflects a net movement in the net workers compensation liability and a reduction in the payment trends. The difference between those two figures is roughly what the shadow minister has referred to on page 1052, 'Employee benefits expenses'.

Mr GOLDSWORTHY: On the same page, immediately under that line, 'Supplies and services' have also increased by $10 million from 2009 to 2010. Can you give an explanation for the increase?

The Hon. M.J. WRIGHT: In regard to the supplies and services, the main reasons for this increase are as follows:

computing and communication, which includes the Microsoft licences, and that accounts for $4.038 million;

motor vehicles, and that is $1.460 million;

accommodation and property, which is to the value of $1.229 million;

legal costs, $1.176 million; and

Shared Services SA, $0.675 million.

Mr GOLDSWORTHY: On the same page, I refer to a couple of lines down under the heading 'Revenues from (payments to) SA government'. Then the next line is revenues from SA government. That, I note, has increased by $46 million from 2009 to 2010. Can you explain the reason for the increase and can you provide a breakdown of those revenues received?

The Hon. M.J. WRIGHT: As to the item on page 1052, entitled 'Revenues from SA Government', the main reasons for this increase are as follows: 27 pays accounted for $16.6 million; the R400 full year including rephasing, $14.7 million; CPI, $10.7 million; sworn enterprise bargaining, $7.5 million; wheel clamping, $4.1 million; superannuation adjustment, $1.5 million; and unsworn EB, $1 million.

Mr GOLDSWORTHY: I refer to Volume 3, page 1118, point 21 headed 'Property held for sale'. The report notes that land is surplus to requirements and will be sold due to the co-sited emergency services facility in Port Lincoln which is now complete. Was there a cost blowout in the construction of the new co-sited facility at Port Lincoln?

The Hon. M.J. WRIGHT: I am not too sure that is in the Auditor-General's Report but I am happy to answer the question nonetheless. There has been an overrun for this project. The project was established with a governance framework that has historically served the sector well, including a similar scale at Mount Gambier. The contract for construction management of the above project has adhered to Australian Standard 4916-2002 and includes sound and widely adopted systems.

A detailed project management plan including scope, time, cost and quality management was approved by agencies. The project management plan specified the process to be followed should there be a variation to the scope, time, cost or quality of the project. The project management team was assigned the responsibility to deal with these variations and the construction management contract to find the process of escalation to be followed. It would appear that there has been a serious breach of authority.

The Government Investigations Unit of the Crown Solicitor's Office has been engaged to investigate the project and its management. Revised project governance arrangements have been implemented, including a building project control committee comprised of senior officers. It should be noted that there are still some unresolved issues regarding contractor performance and associated payment. This will be subject to investigation.

The project manager has been directed to take sick leave and provide a written report from his medical practitioner regarding his fitness for work. Factors contributing to the overrun include: change of design and scope, building code, Australian compliance issues, payment of locality allowance for construction personnel, trades cost pressures linked to the commonwealth stimulus package and Building the Education Revolution.

Mr GOLDSWORTHY: Minister, given that you have given us quite a comprehensive answer, can you provide us with the actual dollar amount of the budget overrun and, as a consequence, have any capital works projects in the CFS and SES been either delayed or suspended? I guess delayed and suspended are the same thing.

The Hon. M.J. WRIGHT: The advice I have received is that the overrun is approximately $1.4 million. The further advice I have received is that no projects have been delayed or suspended. This is regrettable and, obviously, that is why we have taken the steps that we have. I have referred it to the Auditor-General for his advice, and the procedures have been put in place by SAFECOM to remedy the situation.

Mr GOLDSWORTHY: There is a bit of trouble by the sound of it. We have some recreation and sport questions.

Mr GRIFFITHS: I refer to Part B, Volume 1, page 94, scope of audit, which refers to venue management on certain facilities by the Office for Recreation and Sport. Minister, can you just confirm what facilities the Office for Recreation and Sport is involved in managing? Can the minister also give some detail on whether the Office for Recreation and Sport has any involvement in the management of the State Aquatic Centre at Marion when it is completed?

The Hon. M.J. WRIGHT: We do not have a comprehensive list before us of all the facilities that we—what do we do? We manage, lease and licence. Does the honourable member want a few examples?

Mr GRIFFITHS: Even if you would like to provide them—

The Hon. M.J. WRIGHT: We will give you the detail. We will give you the list. Just to give you a quick snapshot, a few examples, it is of the order of about 20 to 25 under those different categories that I mentioned. It includes places such as the Super-Drome, Santos, Hindmarsh, Eagle Mountain Bike Park, the State Shooting Park, and so the list goes on. We will give the honourable member the comprehensive list.

Mr GRIFFITHS: Minister, is it intended that the State Aquatic Centre will become one of those areas soon?

The Hon. M.J. WRIGHT: The State Aquatic Centre went out to tender today. The tender is for the management and the operation of the State Aquatic Centre.

The CHAIR: Thank you, minister.


[Sitting extended beyond 18:00 on motion of Hon. M.J. Wright]


The CHAIR: We now proceed to the examination of the Auditor-General's Report in relation to the Minister for Families and Communities, the Minister for Housing, the Minister for Ageing and the Minister for Disability for 30 minutes. I remind members that the committee is in its normal session, so that any questions have to be asked by members on their feet and all questions must be directly referenced to the Auditor-General's Report. The member for Bragg.

Ms CHAPMAN: My first series of questions is in respect of Volume 2, pages 446 to 448, Grant Payments for Disability Equipment. I wrote to the minister on 29 October this year to advise that I would be asking questions on this particular topic at this inquiry. My first question is: has the minister read these two pages?

The Hon. J.M. RANKINE: Is that your question?

The CHAIR: I do not think that is a relevant question.

The Hon. J.M. RANKINE: Are we trying to do an examination of the Auditor-General's Report or do you think you are putting me on the witness box?

Ms CHAPMAN: I am just asking you that question.

The Hon. J.M. RANKINE: Just get on with your questions.

The CHAIR: I do not think that actually relates to a budget line. Let us assume that the minister has—

Ms CHAPMAN: There are two pages actually; it is not a budget line, it is two pages.

The CHAIR: I am sure the minister has read them.

Ms CHAPMAN: Excellent, let us start with that then.

The Hon. J.M. RANKINE: I have to say that your arrogance is unbelievable.

The CHAIR: Thank you, minister.

Ms CHAPMAN: My question is: did the former minister for disability, now member for Cheltenham, sign the authorisations for grant payments of $2.9 million and $2.15 million for disability equipment which went to the Julia Farr Association in 2007 and 2008, respectively?

The Hon. J.M. RANKINE: My understanding is that the minister signed letters to the chief executive officer confirming the grant decisions that were made in relation to those amounts.

Ms CHAPMAN: Did you understand that those letters were authorisations? Were they purporting to be the authorisations that you have told us require a minister's signature?

The CHAIR: Member for Bragg, for my own clarification: we are on pages 446 up to and including 448. Where is the letter that you speak of?

Ms CHAPMAN: The whole of this section refers to the application of two large sums of money in the year 2007-08, the concern that the Auditor-General has about that, and the obligation for ministerial approval and the signing of the authority. He makes comment about that, and I am simply asking whether the former minister actually signed—

The CHAIR: I understand; I just could not find it.

Ms CHAPMAN: I think the whole section is important.

The Hon. J.M. RANKINE: These two grants that were made to the Julia Farr Association were non-recourse grants. I think if you go through those pages of the Auditor-General's Report you will see that he has indicated that he has a concern that there is a lack of documentation and formal conditions in the very nature of non-recourse grants. We understand why he has those concerns, but the very nature of non-recourse grants are that they are given to respected non-government organisations. Julia Farr is a very respected non-government organisation with whom we have a very good working relationship, so there is very little risk that the moneys provided to such an organisation would not be used for the purposes for which they were provided.

However, we do understand the Auditor-General's concern in relation to that. Let me be really clear to the house: the money that was provided to the Julia Farr Association to provide support and equipment for people with disabilities—as was the decision of cabinet, as is highlighted by the Auditor-General—was expended on exactly that.

Ms CHAPMAN: So, did the former minister sign those grants?

The Hon. J.M. RANKINE: As I said, my advice is that the former minister wrote to the chief executive officer.

Ms CHAPMAN: I will take it, then, that he did sign the authorisations and that the letters he wrote did purport to be the authorisations. Minister, when were you first made aware of this matter and when were you first made aware of the Auditor-General's investigation into this matter?

The Hon. J.M. RANKINE: I am sorry; I cannot answer that question. I will have to come back to the house. I will find out for you; I am not sure.

Ms CHAPMAN: The information provided in the answers to the omnibus questions from the estimates committee hearings in the previous year indicate that grant agreements existed for these payments. Do you have those grant agreements here today, minister?

The Hon. J.M. RANKINE: No.

The CHAIR: This is not relevant. I understand what you are talking about, but I do not think it is really anybody's place to ask whether a minister has or has not a piece of paper with her now.

The Hon. J.M. RANKINE: The member for Bragg thinks she is conducting a trial, ma'am.

Ms CHAPMAN: You would be guilty, that is for sure. Let me go back to the question then.

The CHAIR: That is a little unpleasant.

Ms CHAPMAN: Having given that information to estimates, in response to the previous committee inquiries we have been given two years' worth of lists of grants and who they are to and the like. My question to you then is, if you do not want to indicate whether you have them here today or not: were there grant agreements for these two grants?

The Hon. J.M. RANKINE: My advice is the practice at the time was to have non-recourse grants confirmed in writing by the minister to the organisation receiving them, but let's advise the house about what was paid and what it was actually used for. I think that is really important because the member for Bragg is digging and fishing for something that simply does not exist. There are two important matters that need to be identified. The Auditor-General identified that the grants to the Julia Farr Association were used for the purpose intended, and I quote from page 446:

Of crucial importance, it is acknowledged that the grant funds allocated to the Department were used to facilitate the purchase of disability equipment as was approved by Cabinet.

He also went on to say that he was satisfied that the Department for Families and Communities has new processes in place that demonstrate good management and accountability practices, so let's make those points very strongly. This state government, since coming into office, has a very strong record of supporting people with a disability and providing equipment to support those people. In fact, we have spent over $44 million on disability equipment since coming to office.

In relation to the money that went to the Julia Farr Association, in June 2007 Julia Farr was given $2.9 million to facilitate the clearing of the disability waiting list. In February 2008, $330,000 was spent to fund 120 wheelchairs, hoists, electric beds, orthotics and other items to clients of the Independent Living Centre (ILC) and other organisations. It is important to remember this assistance was being undertaken during a time of great reform in the disability sector, and I hasten to add that reform is continuing. It is even more important to remember that this is assistance that would not have been funded without this money.

In April, $276,000 was funded for 79 orders. In May, $320,000 was provided for 100 items, including powered wheelchairs, some costing in the vicinity of nearly $9,000; manual wheelchairs, some costing $7,000; mobile shower chairs; and electric beds. In 2008, the state government decided to provide a further $2.15 million to continue to allow the Julia Farr Association to facilitate the provision of more equipment.

From this point, Julia Farr continued to provide the money that it was granted to fund disability equipment and home modifications for South Australians who needed assistance. In July 2008, $87,000 was provided for 38 pieces of equipment and some kitchen modifications, and then two amounts of more than $1 million were provided for disability needs before June 2009. These sums of $1.01 million in January and $1.2 million in May, together provided for 670 items of equipment including some assessments and 135 home modifications.

The member for Bragg has queried why the Julia Farr Association still held $1.8 million at the end of the June financial year and the answer is very simple. The simple answer is that, whilst Disability SA had processed equipment worth $1.3 million by 26 June, the invoice was not settled by the Julia Farr Association until 5 August, meaning that the money was shown in the association's annual report.

This $1.4 million provided for more than 1,000 requests including at least 120 home modifications. A further $400,000 was received in December 2009, funding the final 234 pieces of equipment from the government's injection of these funds, the results being 2,100 pieces of equipment and more than 250 home modifications.

Cabinet made a decision to provide one-off grants so that people with disabilities could receive more equipment and that is what has happened. More than 2,000 pieces of equipment were given to people who would otherwise not have received these vital wheelchairs, hoists and slings, and 250 home modifications were carried out in each year. In each of these years, the funds that were provided to the Julia Farr Association alone to provide disability equipment were around the total increase in budget that the Liberals were proposing for the entire disability services had they won government at the last election.

Ms CHAPMAN: I think it is quite obvious from the question that the minister has missed the Auditor-General's point. Let me make it quite clear: we take no issue with the fact that eventually this money filtered through to its final objective, namely, the application for the purchase of disability equipment and the Auditor-General makes that point. What he says on the rest of the two pages though is that the process in getting there was defective and he is critical of the process that was applied, namely, the allocation of these moneys which he found to be consistent with an attempt to hide that money at the end of the year. That is what he says.

The Hon. J.M. RANKINE: No, he does not!

The CHAIR: Where does he say that?

The Hon. J.M. RANKINE: Can you point out where he says that?

The CHAIR: Yes.

Ms CHAPMAN: If the minister has not read this, I am happy to read it to her.

The CHAIR: I have not read the whole thing.

Ms CHAPMAN: On page 446, he states:

The Cabinet approved funding for disability equipment was received too late in each of the financial years to provide the manageable opportunity for the orderly purchase of disability equipment before the end of the year.

That is the first criticism. The Auditor-General goes on:

It is understood that this factor, together with the risks either of not receiving the funds or not retaining the funds through the approved carryover process, were the motivating factors for the practice of one-off grants to JFA and their subsequent recovery.

The CHAIR: I can't see the word 'hide'.

The Hon. J.M. RANKINE: Where is the word 'hide'?

Ms CHAPMAN: That is the condemnation of the government's action in doing this, which is why we have two pages—

The CHAIR: Excuse me, member for Bragg, just one moment. You did use the word 'hide'. I have page 446 in front of me. There is no mention of hiding. Let us move on.

Ms CHAPMAN: Madam Chair, obviously, the minister has not read the two pages and neither have you, so I will come back to my question.

The Hon. J.M. RANKINE: Where does it say 'hide'?

The CHAIR: It doesn't.

Ms CHAPMAN: Did the return of funds—this is what you have given us detail of; you know all about it—comply with the grant agreements given that the money was not spent in the following year for each of those transactions? As you just pointed out, it went into the year after that again: that is, by 30 June—a year after you had allocated it—it was still there and you just told us that you paid it in August. So, something like 14 months later, it is all emptied out, according to what you have said. Did the return of the funds—because they came back from JFA to Disability SA—comply with the grant agreements, given the money was not spent in that year?

The Hon. J.M. RANKINE: Let me just make sure I place on the record to start with that nowhere does the Auditor-General suggest that anyone hid anything. In fact, the Auditor-General states in the sentence above the one that the member for Bragg quoted:

Of crucial importance it is acknowledged that the grant funds allocated to the department were used to facilitate the purchase of disability equipment as was approved by Cabinet.

No one hid anything. So, you stand up here and just make things up. You verballed the Auditor-General—

The CHAIR: Minister, I do not think we are going to accuse the member for Bragg of making things up. I agree with you that the word 'hidden' is not there. Clearly, the member for Bragg chooses to interpret these words in a certain way.

The Hon. J.M. RANKINE: Unfortunately, ma'am. In fact, the equipment was purchased in the financial year in which it was allocated, in June. No one could—

Ms Chapman interjecting:

The Hon. J.M. RANKINE: You can shake your head, but it just goes to show that you have no idea—

Ms Chapman interjecting:

The Hon. J.M. RANKINE: No, you have no idea—

Ms Chapman interjecting:

The Hon. J.M. RANKINE: I did, and you didn't listen. You have no idea—

Ms Chapman interjecting:

The Hon. J.M. RANKINE: I can give you the—

Ms Chapman interjecting:

The Hon. J.M. RANKINE: No, it wasn't. It was expended during the year. You do not just buy these things off the shelf—

Ms Chapman interjecting:

The Hon. J.M. RANKINE: I have given you the dates and they were—

Ms Chapman interjecting:

The CHAIR: I think the minister is still answering the question, member for Bragg.

The Hon. J.M. RANKINE: They were bulk billed. You were given the dates. The money was given to Julia Farr in June and expended during the next financial year, as expected.

Ms CHAPMAN: On what dates was the JFA invoiced to recover that money, what were the payment amounts, and where do the incoming funds appear in your accounts?

The Hon. J.M. RANKINE: The first invoice to the Julia Farr Association was entered into DFC's records on 14 February 2008 and in the Julia Farr records on the same date. The next invoice was 11 April 2008 and in the Julia Farr records in April 2008. On 28 May 2008 and, accordingly, 28 May in the Julia Farr records—sorry, did you ask for the amounts as well?

Ms CHAPMAN: Yes.

The Hon. J.M. RANKINE: I will go back. The first one on 14 February was for $330,234.40; on 11 April, $276,746.25; on 28 May, $321,261.01. They appeared at the same time, according to the information I have, in both sets of records. Then there was an additional $2.365 million that went to the Julia Farr Association, and it was entered in their records on 19 June. On 30 June 2008 there was an invoice for $87,868.53, and it was recorded by the Julia Farr Association on 31 July. The $2.365 million was inclusive of GST—that is $2.150 million.

I have given you June and July. On 28 January, there was an invoice for $1,018,280.22, and that was recorded by the Julia Farr Association on 28 January. On 29 April, there was an invoice for $1,209,134.22, and that was recorded by the Julia Farr Association on 26 May.

Ms CHAPMAN: These are new payments?

The Hon. J.M. RANKINE: No, they were invoices. On 26 June, there is another invoice for $1,426,396.23, and that was recorded by the Julia Farr Association on 5 August. Then we have an invoice on 30 December 2009 for $400,152, recorded at the same time by the Julia Farr Association. The final deduction was a credit of $71.86, if I have read this chart correctly.

Ms CHAPMAN: So you will see, minister, from a payment program over the period from 14 February 2008 until the final invoice of 30 June 2009—so we are talking over nearly a two-year period—the money was invoiced in amounts back to Disability SA. This money came in in two large lots, as the Auditor-General tells us, and then on the invoice they were paid back to your department to buy the equipment. My question is: of this $5.1 million which was held in trust in the Julia Farr Association to be applied for purchase of equipment by your department, who got the interest on that money and did you ever get any of it back?

The Hon. J.M. RANKINE: It is the very nature of non-recourse grants to non-government organisations that they have that money and they derive the benefit of it. We know they struggle to provide the services that they do, and it is something that we are very well aware of when we make those grants.

Ms CHAPMAN: So you have made a grant to the Julia Farr Association—and this is, according to what you have said, practice—to provide money back to you on invoice to buy disability equipment (because they are not in the business of disability equipment). They have held that money over nearly a two-year period, and they get all the interest on it and you do not get any of it back. Is that what you are telling us?

The Hon. J.M. RANKINE: They did not hold the money for two years. They had two payments—one payment in one year, and one the next.

Ms CHAPMAN: You just gave me the figures. There were two lots of payments. One was made in a later financial year, 2007, which is the $2.92 million, and then $2.15 million in the June—

The Hon. J.M. RANKINE: Yes.

Ms CHAPMAN: The invoices traverse from 14 February 2008 to 30 December 2009 to pay it back. That is over two years nearly; is that correct?

The Hon. J.M. RANKINE: They are two payments over two years.

Ms CHAPMAN: But all these invoices come back, you give them an invoice, and they give it back to you in bits, as you just outlined to us, over two years. They have over $5 million held in their account for disability equipment that your department buys, so it is sitting over in the Julia Farr Association account over that two-year period. My question is: why do you not get the interest back on that money?

The Hon. J.M. RANKINE: Because it is the very nature of non-recourse grants. They did not have $5 million sitting in their account over two years. They had one grant that was paid down; they had another grant that was then paid down. They did not have $5 million sitting there gaining interest.

Ms CHAPMAN: But you would agree, minister, that while they got it in the two payments and some was paid out before the end of each of those periods, they had millions of dollars total in their accounts which someone got interest on. All I want to know is whether you got any of it, or did Julia Farr get the benefit of this money throughout the time it had it?

The Hon. J.M. RANKINE: The very nature of non-recourse grants is that the non-government organisations get the benefit of that. You might have a problem with the Julia Farr Association, but we do not. We actually think it is a very credible organisation.

Ms CHAPMAN: Not at all. No problem.

The Hon. J.M. RANKINE: Good.

Ms CHAPMAN: My next question is: will you provide on notice a list of all the grant payments made to NGOs in the 2009-10 year which are listed as 'other' on page 476 which totals $42 million?

The Hon. J.M. RANKINE: I am told we can provide you with that information.

Ms CHAPMAN: I refer to Volume 4, page 1230, regarding capital works of the Housing Trust. At the bottom of that page, minister, in particular the last two paragraphs, it has been identified that the Housing Trust sought approval to vary Treasurer's Instruction 17 which deals with ministerial and cabinet approval before projects commence. As you will see there, that application was denied; that is, they asked not to have to comply with it and that was rejected. What contracts were entered into by the Housing Trust without your approval as required by the Treasurer's Instructions 8 and 17, and what was the value of these projects?

The Hon. J.M. RANKINE: I am advised there were none.

Ms CHAPMAN: So what was the basis, minister, for the application to be exempt from Treasurer's Instruction 17?

The Hon. J.M. RANKINE: I am told greater efficiency.

Ms CHAPMAN: Can you assure the committee that, notwithstanding this request in the Housing Trust's view that it is more efficient not have to get your permission for things, in fact they have continued to comply with Treasurer's Instruction 17 and that where required you have given that approval?

The Hon. J.M. RANKINE: As far as I am aware that is the case.

Ms CHAPMAN: I refer to Volume 2, page 448, on Families SA alternate care. Here, minister, the Auditor has identified the department's annual review of the registered caregivers has not been completed for a number of caregivers at the time of the audit. The report goes on to say that the department has told the Auditor that this would be completed by September. How many caregivers had not been reviewed as required by the act at the time of the audit, and are there any reviews still outstanding?

The Hon. J.M. RANKINE: I am sorry I cannot give you that number. I am happy to take that on notice. But I am told that to ensure compliance with the policy and legislation the department is taking steps to ensure that support workers receive notification when a review of a carer is due. The department currently monitors non-government support agencies through the registration and licensing branch and will replicate this process for relative and kinship care services.

Ms CHAPMAN: At page 473 regarding staff salaries, I note that at 2008-09 your department had just one employee who earned more than $250,000 and now there are seven. Can you please explain?

The Hon. J.M. RANKINE: I am advised that there is an increase of 55 staff that can be grouped above the $100,000 mark; 44 more staff were within the administrative officer range; 11 more staff within the health and social welfare area; and there was no change to the number of executive officers in our department. In fact, I think we run very well compared to other agencies in the Public Service with about 0.7 per cent of our employees at executive level compared to about an average of 3 per cent.

Ms CHAPMAN: Sorry, it seems that we are at cross-purposes. My question was over $250,000. So, minister, if you are looking at page 473 you will see that in the program provided there that last year there was one and now there are seven in the over $250,000. I am not asking about anything else. The explanation is in relation to those.

The Hon. J.M. RANKINE: There were a number of employees who received TVSP payments. When combined with their normal salary and payments for all accrued annual and long service leave, their gross remuneration was in that vicinity.

Progress reported; committee to sit again.

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