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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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REGIONAL DEVELOPMENT AUSTRALIA

Mr VAN HOLST PELLEKAAN (Stuart) (11:31): I move:

That this house:

(a) notes the very important work of Regional Development Australia (RDA) in South Australia; and

(b) condemns the Labor government for the withdrawal of core funding to the RDA entities beyond 30 June 2013 and its failure to fulfil its promise in the 2010-11 budget to assist RDA boards to find alternative funding.

I point out that this applies to the Adelaide Hills, Fleurieu and Kangaroo Island RDA, and the Barossa, Far North, Limestone Coast, Murraylands and Riverland, Whyalla and Eyre, and Yorke and Mid North RDAs.

I would like to start, in line with my motion, by highlighting the very valuable work that these RDAs do. They do a great deal of work, primarily with regard to economic and business development and, probably equally as important, they do social and community work. Of course, those two broad areas combined help generate what is one of the most important contributions any organisation can make, which is helping to grow employment.

In regional and outback South Australia, we need jobs, and at this point in time I certainly highlight the fact that, along with the government, I see mining as our greatest growth area for economic and employment opportunity, but it will be many decades until mining overtakes agriculture and primary industries in general as our greatest wealth contributor and our greatest driver of economic wealth in our state. It is very important to point those two things out. There are others, of course, but, while mining is a great growth opportunity, it is nowhere near agriculture when it comes to its contribution to our state.

As well as economic and business development and social community aspects, a very important function that RDAs perform throughout regional South Australia is actually draw together many other government agencies. They take an integrated approach to regional development in their patch and they work with NRM boards, for example; they work with local government and many state and federal agencies.

The way they go about that work, of course, will be slightly different in different regions. They are different regions with different threats and different opportunities, but that integrated approach is fundamental to what they do. Without that sort of attitude, they would not be successful. They would not have had the success that they have had and will not be able to find as many opportunities for future development as they would if they did not undertake that task.

I would like to recognise the good work of regional development boards, which were the precursors for Regional Development Australia organisations, because they have both tried to do that. I would also like to recognise that in that transition from RDBs to RDAs, which was actually put forward by state and federal Labor governments to create the three-tiered funding model we have under RDAs, that was a very positive move, and I congratulate state and federal Labor governments for having done that. That three-tiered model, which combines local, state and federal governments in the work of RDAs, so all three tiers of government work collaboratively on their particular patch, is a tremendous development and should live on, whether there are Liberal or Labor state or federal governments in control. That is a very positive thing.

That transition was made over 2008-09 and was a very difficult transition for many boards. It was a very difficult transition for many of them; not all of them but some, like Limestone Coast, for example, had essentially the same patch but just had to rework their funding and their partnership agreements, but did not change the world too much for them. If you look at Whyalla and Eyre Peninsula, at Yorke and Mid North, they had a much tougher time because they were trying to combine boards, change their geographic footprint significantly, but they managed.

They went through all that work and came out the other end better and stronger, only to find that the state government withdrew its core funding to that. That was a really disgraceful kick in the guts for those groups; to be told all the way along that if you can do this, if you can transition and turn yourselves inside out and move towards that really good, three-tiered core funding model, the world will be better. It would have been, except for the fact that the state government has withdrawn its funding.

The state government has and does currently contribute $4.1 million of core funding to the seven RDAs, and that is an average of $585,000 per board—some get a bit more, some get a bit less. The government in the 2010-11 budget removed that $4.1 million funding with effect at the end of June 2013, this financial year. At the time, back in the 2010-11 budget, the government said that it will work with RDAs to identify alternative funding sources.

Disgrace No.1 was to remove the core funding that they promised; disgrace No.2 for the fact that they actually have not done that—they have not replaced core funding. The core funding at the end of this financial year will be gone. The 2012-13 budget, which we have just had handed to us, confirms that. The government will change an existing $3 million program, the Regional Development Infrastructure Fund, and use that $3 million for a new regional development fund, but the reality is that right now we have $3 million in the RDIF, plus $4.1 million in core funding, and at the end of this financial year we will be left with only $3 million of funding, and it is not core funding.

There is a very big difference between core funding and non-core funding. The new regional development fund, the $3 million, will be competitive funding broken up into two streams—$1.4 million in stream 1, which is only available for RDAs to apply for (and they can apply for a maximum of $200,000 each) and $1.6 million, which any organisation doing regional development work can apply for. That is also competitive funding, but the most any organisation can receive under that fund is also $200,000.

So, if RDAs apply for both stream 1 and stream 2, and if they are as successful as they possibly can be under both those streams, they will receive $400,000 in any given year under this competitive funding model. Right now, they get on average $585,000 of core funding, of guaranteed funding, towards them. Not only are they having their funding significantly reduced from an average per RDA of $585,000 to a maximum of $400,000 but they are also losing the guarantee that they have. The people doing good work in regions now have to plan their projects based on competitive one-year funding models.

You cannot retain good people in regions to do really important regional development work and you cannot attract good people to regions to do really important regional development work if you cannot offer them secure employment. You certainly cannot offer them secure employment if your funding has to be sought competitively for one year at a time.

When asked about this in estimates, minister Gago, the Minister for Regional Development, said that it is just the same, it does not really matter and, right now, they typically offer three to five-year contracts. I say to the house that the difference between a one-year contract versus a three to five-year contract is very significant. I am sure that, if minister Gago's eight-year employment term was reduced by the same sort of percentage, she would understand that it is actually significantly different. It makes a big difference. You will not get good-quality people to do this very important work if you cannot offer them secure employment for their wages and that is a great shame.

It does not matter what the government says. I am sure the government will have a very carefully worded response to this motion and I am sure that they will tell us all what a fantastic job they are trying to do. I do not say for a second that they are doing nothing. They do contribute money towards regional development, but the key here is that the $4.1 million of core funding is being withdrawn and not being replaced. The key issue is that not only is it a significant decrease in the amount of money that is available to the RDAs to do the work but the core funding—and this is the bit that I think minister Gago really just does not get—is disappearing and being replaced with competitive funding.

Competitive funding is perfectly good for projects. I support competitive funding for projects because there will always be more projects out there than money to actually fund and finance them. So, there is no trouble at all with regard to projects, but you cannot use competitive funding models for wages. You cannot use competitive funding models to be paying the rent. You cannot use competitive funding models to be supplying vehicles or offices and other equipment that people need to do their work.

The bottom line here is, right now, we have $7.1 million devoted to regional development—$3 million through the RDIF plus $4.1 million through the core funding—and we are going to be left at the end of this financial year with just $3 million of non-core funding, competitive funding. It will be very difficult for the RDAs to continue to do the very good and very important work that they have done over many years, both as RDBs and now as RDAs, without that core funding.

I also have a very grave fear that what the government may be trying to do here is to set them up for failure. They might be just trying to trim and to set them up for a sort of attrition, with less and less funding—not killing them straight off but just keep them swimming and trying to stay afloat; setting them up so that they will find it almost impossible to exist.

I think that it is very possible that the government would like to bring in RDAs under another government department, just as they have done with natural resource management boards. We have seen natural resource management boards which were stand-alone organisations with their own boards, their own staff, their own employment contracts and funding that came from a range of organisations, including the government, all brought back in within the Department of Environment, Water and Natural Resources so that they are essentially just a branch of DEWNR these days.

With RDAs, we have a very similar situation to what we used to have with NRMs—their own boards, their own employment contracts, their own officers, their own stand-alone situation to do their own work. I believe that that is going to be deliberately undermined by the government to bring RDAs back in under a government department.

One of the many reasons I think that is not only because of the funding but if you look at the targets, goals and highlights that have been given to us in the last budget, it is all about the RDAs contributing to the government's seven key priorities for this state. I am not undermining those seven key priorities. There is no problem there at all. If that is what the government has decided it wants to focus on, that is acceptable, but then to use these meant to be independent stand-alone organisations in regions—and it says it in black and white in the budget—to implement the government's priorities in its regions, that is backwards. It should be all about the government supporting the RDAs in their regions to implement the priorities that the independent RDAs have identified as important for their area.

It does not matter whether it is the far northern outback or the far South-East or Eyre Peninsula, these organisations are set up to work with government on the issues that need to be done in their part of the state. It should be the government supporting them to do that work, not the government taking their core funding away and pretending that it can give less money under a competitive model and that that will be the same; and it should not be government telling them what the government wants the RDAs to do, that is, to implement the government's own priorities out into their regions.

For those reasons, I am extremely concerned because I think the government is really just trying to slowly suffocate, slowly strangle, these organisations into submission so that these organisations will just do the work that the government wants them to do in the regions, rather than getting on and harnessing the knowledge, the experience and the energy of all sorts of people—successful businesspeople, young people, Aboriginal people, small business and big business, including mining—out in the regions.

There is agriculture and horticulture. We have an extraordinary wealth of knowledge in the regions of South Australia, which is actually contributing to creating our state's wealth. The people in the regions of South Australia create our state's wealth. They know what they are doing. They do a very good job, and the government should be listening to them and their priorities and not trying to use them to implement the government's own priorities.

Ms THOMPSON (Reynell) (11:46): I move to amend the motion as follows:

Delete all the words after 'notes' and substitute the following words:

the very important work of

After '(RDA)' insert 'associations'

After 'South Australia' insert 'do perform important work; and'

Delete all words after '(b)' and substitute the following words:

acknowledges that the state Labor government is providing ongoing support to regional communities through Regional Development Australia (RDA) associations.

Just in case anyone got a little lost during that, I will read the motion as it would read:

That this house:

(a) notes that Regional Development South Australia (RDA) associations in South Australia do perform important work; and

(b) acknowledges that the state Labor government is providing ongoing support to regional communities through Regional Development Australia (RDA) associations.

I want to point out that the state government is committed to regional South Australia and growing the capacity and sustainability of regional—

The DEPUTY SPEAKER: Order! There is a point of order.

Mr VAN HOLST PELLEKAAN: Can we vote on whether the house accepts that amendment?

The DEPUTY SPEAKER: No, she actually gets a chance to speak to it. The member for Reynell.

Ms THOMPSON: While we are driving key economic goals, we must also consider the needs of families in these areas to ensure that we achieve sound social as well as economic outcomes. Good regional planning, driven by good regional leadership, is essential to clearly articulate goals and to identify key milestones along the journey.

State budgets over recent years have delivered investment projects in our regions that come to just under $330 million over the next four years. RDAs serve a number of economic development purposes in communities for the commonwealth, including consultation with local communities and development of the regional plans (or road maps) that outline the challenges and opportunities identified by the local community.

The Sustainable Budget Commission in 2010 recommended that state funding to RDAs cease on 30 June 2013 at the conclusion of the current five-year grant funding agreement. However, this year's state budget included an overhaul of regional development funding to keep growing South Australia's sustainable regions. From 1 July 2013, a new regional development fund will provide $3 million per year for programs that support regional economic development, employment and the attraction of new investment. Existing funding arrangements will remain in place until 30 June 2013, with the regional development fund coming into effect after that.

The new regional development fund will provide opportunities for a broader range of projects to be considered and will replace the existing state government funding for RDA committees, as well as the Regional Development Infrastructure Fund. Stream 1 of the Regional Development Fund is open to the Regional Development Australia committees for programs which will further the key regional priorities of realising the benefits of the mining boom for all South Australians, premium food and wine from our clean environment, and advanced manufacturing.

This funding will mean that the state government will be contributing to the programs of RDAs to about the same level as the commonwealth and local government. Ensuring that a pool of funds is available and known to the RDAs well in advance should assist these regional organisations to retain staff and plan for the future.

The second stream of the RDA fund is available to organisations, councils and RDAs to continue the work of facilitating investment and jobs in regional areas. These funds replace the previous RDIF. This fund's eligibility criteria were seen by many as being too limited and restrictive, as eligible projects were confined to the infrastructure elements only. The new fund, which is much more flexible, will enable committees in regional areas to leverage funding from a range of sources, including the federal government's billion dollar Regional Development Australia Fund.

It is important that the support the government provides to the regions continues to strategically target programs that result in investment and jobs. It is money wisely spent because a great deal of South Australia's future hangs on how we develop our regions and build communities in developing mining areas. Our mining industries and the potential for renewable energy are key opportunities for South Australia and most of that activity will take place in regional South Australia. The Minister for Regional Development is a strong advocate for local communities and for the businesses and industries that provide job and investment opportunities to grow sustainable and competitive regions.

Mr GRIFFITHS (Goyder) (11:52): I have some level of respect for the member for Reynell. I like my discussions I have with her, and all that sort of stuff, but that was poppycock. I have to tell you, I find it very difficult to accept that. I am trying to be polite here, but I have heard a lot of things said in the other chamber and in this chamber in my time in the parliament, but I just cannot accept that the decision has been made as part of the budget process over two years ago about withdrawing the funding from the RDA, so I do commend the member for Stuart in bringing this motion before the chamber for debate.

I declare that I have been a board member on at least two RDA structures, when they were as regional development boards in the past. With my local government previous experience, I worked with RDAs, even when I was not a board member, and focused on trying to improve business, community and social development opportunities within the regions. It is very clear to me, and has always been very clear to me, that some security when it comes to funding arrangements being in place is an absolute priority.

It was exemplified more than anything to me when the Hon. Michael O'Brien was the minister for regional development and in an estimates hearing at the time I was asking him questions, because it was straight after the decision had been made to withdraw funding as at 1 July 2013. We asked a series of questions and the minister acknowledged it. I think in his heart he wanted to do something else—he did truly want to do something else—but he was being forced by pressure from above to try to create savings, balance budgets and reduce deficits, and all that sort of stuff. I had to stop asking questions because I just said, 'If I don't stop now my brain is going to explode out of frustration.' That is the stage it got to for me.

It is a relatively small amount of money but I can assure members in this chamber that the significance of it is enormous. The good people who work in all the RDA structures are focused on their communities. They have great contacts, they have a lot of historical knowledge about projects, they know where the opportunities are to grow, they are there to support and mentor small businesses, family businesses, all scopes of businesses in regional South Australia, and they are there to try to attract bigger development opportunities and infrastructure investment. They need some security of funding to ensure they have those good staff available to them.

To now be in a situation where a motion, which was quite appropriate given the budget decisions made over the past two years, has been amended so significantly as to turn around the message, and to expect this side of the chamber to support it, is craziness. The member for Stuart, in his time in the parliament over the past two years, has a very good grasp of it. He knows how Regional Development Australia structures work and he knows the difference they can make. The fact that he has brought it to us means that we need to consider it quite seriously.

I will stand up and acknowledge a good decision that has been made only in the last month or so where, from the Regional Development Australia federal fund that the member for Reynell referred to, of the $1 billion that is available $200 million of that has been allocated provisionally, as I understand it, and $10 million of that is coming to a project within the Goyder electorate, and neighbouring Stuart?

Mr van Holst Pellekaan interjecting:

Mr GRIFFITHS: No; with the Auburn to Port Wakefield water pipe. That is not you. It is a great project that is going to allow for chicken farm expansion to occur and growth in townships to happen. It is a very important project that state and federal Labor has supported, and I commend them for that, but by withdrawing the core funding necessary for RDA to have the structure in place to ensure it can secure and keep its good people on some term of contract—be it two, three, four or five years, instead of the one year option that is available to them now—is a disgrace and I can never support the amended motion put by the member for Reynell.

Mr PENGILLY (Finniss) (11:56): I also wish to make a contribution in light of the amendment. I think the amendment is an absolute nonsense, and I will refrain from using stronger language in this place. The reality is that—

The Hon. R.B. Such: This is the upper house. You have to tone it down.

Mr PENGILLY: Yes, that is right. The reality is that regional development boards, or RDA boards as they are now known, are absolutely critical to regional Australia, and in this particular case South Australia. I, for one, was not all that happy about the change to the new board structure and the putting together of larger regional boards, which took away some of the local impetus for development. However, happily, the RDA board in my electorate is working pretty well. It has particularly competent staff and I know that I can pick up the phone and ring a couple of those staff at any time and receive a great deal of support.

However, financially, the state government has neutered the RDA boards with their commitment, if not worse, quite frankly. It has left them in a position of struggling to fulfil what they should be doing and it is a great disappointment. What the boards need to come up with, and what they are being criticised for, is lack of outcomes. There are a multitude of reasons for that, but for them to reach their maximum fulfilment they have to be funded adequately. I think it is an absolute sham for the South Australian state government to stand up in this place and amend the member for Stuart's very good motion by suggesting that the state government is making some sort of magnificent contribution to RDA, because it is not.

It is like everything else, it is all spin, spin and no substance, and a lot of rubbish. I am sure other members in this place use their RDA boards in a similar manner as I do. Indeed, we need to use them to make them work, but they have to be funded. This state government is an absolute disaster. With the level of debt it has run this state out to, it should be embarrassed to even be in this place making any comment on anything, quite frankly. It is an absolute disaster. It goes on and on and on and on and on. You only have to look at what has happened in the last week or so with various projects to see that all they are on about is getting themselves re-elected in 2014.

I can tell you that in regional South Australia, and increasingly in metropolitan South Australia, you are on the nose, you are on the nose big time, and you only make yourself further on the nose with activities such as this, in trying to put up the scenario that you are great supporters of RDA because you are not. So, with those few words, I totally and absolutely oppose the amendment. It is rubbish.

Mr PEGLER (Mount Gambier) (12:00): I would first of all like to say something about the process of this amendment. My understanding has always been that an amendment to a motion was to build on a motion, not to completely negative a motion. So I will certainly be voting against the amendment because it is the complete reverse of the original motion. As far as the original motion is concerned, I supported very strongly the new structure for RDAs in South Australia. The South-East region was amongst the first in Australia to bring the three levels of government together—the federal government, state government and local government—to fund and manage RDAs. I think it is a tremendous system we now have in place, where all those bodies are together.

They were agreements on funding, but no sooner had the ink dried on those agreements than the state government started to pull the funding on the RDAs, so I was quite disappointed in that fact. I know that with our own local RDA I have many businesspeople come to see me on different issues, and I always refer them to the RDA, or often sit down with our local RDA to work ways forward. Also, the RDAs work exceptionally well with some of the social issues that we have within our regions, so they do a tremendous job in the state. It is not a lot of money that we are talking about as far as the whole budget of the state goes. I think that the state government should continue to fund the RDAs to the extent that they used to because of the great work they do within our regions.

Mr VAN HOLST PELLEKAAN: Point of order: I am sorry, because we are out of sorts here and I have not got my book, but I believe that there is a standing order that says you cannot put forward an amendment if it substantially alters the intent of the motion. I think that to change the relevant part of the motion that states 'condemns the Labor government for the withdrawal of core funding' and turn that into 'acknowledges the state Labor government is providing ongoing support' completely alters the intent of the motion and so makes the amendment unacceptable in the house.

The ACTING SPEAKER (Hon M.J. Wright): The advice I have received is that the amendment is relevant to the motion and as such is in order. You have right of reply for five minutes.

Mr VAN HOLST PELLEKAAN (Stuart) (12:03): Thank you, Mr Acting Speaker, for the five minutes, not for your decision on the amendment. I noticed a few points that the member for Reynell, on behalf of the government, has made. In her speech she said that the state budget has provided an overhaul of regional development funding. Well, certainly, that is very true. That is a nice way of saying 'gutted it'. The bottom line is that it has been reduced significantly not only in the quantum of the funding but also in the way the funding is provided. We no longer have core funding, but we have competitive funding. As I said before, I am not opposed to competitive funding at all for projects, but you cannot use competitive funding for ongoing wages, offices, key work, and attracting and retaining good staff.

The fact that the RDF is a new fund was mentioned. Certainly that is very true: it is a new fund, but it is not new money. It is not new money at all: it is just a new fund in name, but there is no new money coming into the system whatsoever. I also noticed that the member for Reynell said that this new funding is funding to the same level as local and federal governments fund. That may well be very true, but I am not sure why the government wants to necessarily come down to the lowest common denominator on this issue. That is inappropriate, but the most important issue is that it is reducing the funding. The core funding that the state government is going to contribute will be zero. It is taking it from $4.1 million down to zero.

Local and federal governments contribute approximately the same as the state government will, but they contribute about $3 million in core funding. So if you replace the core funding with a competitive model, it means that that statement is just completely misleading, that is, that funding will be to the same level as local and federal governments. They will retain, presumably, their core funding and the state government will reduce their core funding down to zero; so I think that is an inappropriate comment.

In terms of the level, the fact is that now under the new RDF the most that any RDA can receive, if they are as successful as they possibly can be in both streams (stream 1 and stream 2), is $400,000. They currently get on average $585,000 each, which in effect is a 68 per cent reduction. Not only has core funding gone from $585,000 on average per RDA down to zero but the actual total they can achieve under the competitive model has been reduced by 68 per cent as well. I do disagree strongly with some of the comments that have been put forward by the member for Reynell on behalf of the government. I state again that I think the amendment is completely inappropriate and that will not escape the judgement of people outside this house.

The house divided on the amendment:

AYES (19)
Atkinson, M.J. Bedford, F.E. Caica, P.
Close, S.E. Conlon, P.F. Geraghty, R.K.
Hill, J.D. Kenyon, T.R. Key, S.W.
Koutsantonis, A. O'Brien, M.F. Odenwalder, L.K.
Piccolo, T. Portolesi, G. Sibbons, A.J.
Snelling, J.J. Thompson, M.G. (teller) Vlahos, L.A.
Wright, M.J.
NOES (15)
Brock, G.G. Gardner, J.A.W. Goldsworthy, M.R.
Griffiths, S.P. McFetridge, D. Pegler, D.W.
Pengilly, M. Pisoni, D.G. Sanderson, R.
Such, R.B. Treloar, P.A. van Holst Pellekaan, D.C. (teller)
Venning, I.H. Whetstone, T.J. Williams, M.R.
PAIRS (12)
Weatherill, J.W. Redmond, I.M.
Bettison. Z.L. Evans, I.F.
Bignell, L.W. Pederick, A.S.
Rankine, J.M. Hamilton-Smith, M.L.J.
Fox, C.C. Marshall, S.S.
Rau, J.R. Chapman, V.A.

Majority of 4 for the ayes.

Amendment thus carried.

The house divided on the motion as amended:

AYES (20)
Atkinson, M.J. Bedford, F.E. Caica, P.
Close, S.E. Conlon, P.F. Geraghty, R.K.
Hill, J.D. Kenyon, T.R. Key, S.W.
Koutsantonis, A. O'Brien, M.F. Odenwalder, L.K.
Pegler, D.W. Piccolo, T. Portolesi, G.
Sibbons, A.J. Snelling, J.J. Thompson, M.G. (teller)
Vlahos, L.A. Wright, M.J.
NOES (14)
Brock, G.G. Gardner, J.A.W. Goldsworthy, M.R.
Griffiths, S.P. McFetridge, D. Pengilly, M.
Pisoni, D.G. Sanderson, R. Such, R.B.
Treloar, P.A. van Holst Pellekaan, D.C. (teller) Venning, I.H.
Whetstone, T.J. Williams, M.R.
PAIRS (12)
Weatherill, J.W. Redmond, I.M.
Bettison. Z.L. Evans, I.F.
Bignell, L.W. Hamilton-Smith, M.L.J.
Rankine, J.M. Pederick, A.S.
Fox, C.C. Chapman, V.A.
Rau, J.R. Marshall, S.S.

Majority of 6 for the ayes.

Motion as amended thus carried.

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