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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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Auditor-General's Report

AUDITOR-GENERAL'S REPORT

In committee.

(Continued from 30 October 2013.)

The CHAIR: We have the Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy. Could I remind members that they must reference the Auditor-General's Report when they ask their questions. Member for Unley.

Mr PISONI: This is page 689. In 2012, we saw a list of current creditors at just over $20 million—$20.828 million—and for 2013 we saw that almost triple to $60.8379 million. Are you able to explain if those creditors were paid on time at the end of the year?

The Hon. G. PORTOLESI: I have with me the head of DFEEST, Mr Raymond Garrand. My advice, although we are searching for the briefing, is that I think above 90 per cent of our creditors are paid within the government standard; however, I can confirm with greater detail information in that regard.

Mr PISONI: Can you advise whether any of that increase of $40 million in creditors was TAFE?

The Hon. G. PORTOLESI: Are you still referring to page 689? You will need to give me a few minutes because I need to confer with my colleagues from TAFE as well. I will take that on notice.

Mr PISONI: Was any of the $60 million subject to a dispute or legal action?

The CHAIR: Same page number?

Mr PISONI: Same page number, yes.

The Hon. G. PORTOLESI: The member will appreciate that in November TAFE became an independent statutory corporation but I can report that in 2012-13, in relation to this matter, payables increased by $53 million, which is primarily attributable to an increase in creditors and accrued expenses of $58.6 million relating primarily to TAFE SA due to the implementation of Skills for All, and partly offset by a reduction in employment on-costs of $5.5 million due to the transfer of staff from DFEEST to TAFE SA.

Mr PISONI: Are you answering the question about whether any of the $60.8 million that you owe creditors is subject to dispute or legal action?

The Hon. G. PORTOLESI: No, it was an explanation of that figure.

Mr PISONI: I am sorry, but you have not explained why you have $40 million more in creditors at the end of 2013 than you had at the end of 2012. That was the question.

The Hon. G. PORTOLESI: Because, for the first time, TAFE is a separate agency for the purposes of the Auditor-General. Before 1 November, it was all in the same agency. Now, after 1 November, they are separate.

Mr PISONI: No, this refers to creditors of DFEEST.

The Hon. G. PORTOLESI: There are Skills for All payments.

Mr Pisoni interjecting:

The CHAIR: The minister is on her feet at the moment.

Mr PISONI: These are creditors of DFEEST. It is nothing to do with TAFE. You were not able to answer the question earlier as to whether TAFE is even a member of this credit list.

The Hon. G. PORTOLESI: But TAFE gets funding through Skills for All.

Mr PISONI: Yes, but I asked you earlier whether TAFE was included in this credit list, and you could not answer that question.

The Hon. G. PORTOLESI: Yes, TAFE is now a creditor of DFEEST.

Mr PISONI: Are you saying that part of that $60 million is Skills for All funding to providers, including TAFE?

The Hon. G. PORTOLESI: Yes.

Mr PISONI: Are you able to also advise whether any of that $60 million is subject to dispute or legal action?

The Hon. G. PORTOLESI: My advice is that it is not, but I am going to double-check that.

Mr PISONI: This refers to page 682 of the Auditor-General's Report. Mr Garrand advised the Budget and Finance Committee on 15 April of the FTE reduction target for DFEEST. Are you able to advise whether those figures still stand and whether they were achieved?

The Hon. G. PORTOLESI: What were those figures, sir? He has referred to the page.

Mr PISONI: Mr Garrand is right next to you.

The Hon. G. PORTOLESI: You are asking the questions and I am seeking clarification from you about the nature of your question.

Mr PISONI: Mr Garrand quoted '220 or so'.

The Hon. G. PORTOLESI: I do not need you to verbal Mr Garrand. I need clarification from you about the figures you are—

Mr PISONI: It's not my fault if you don't come prepared, Grace.

The CHAIR: Order! The minister has the call.

The Hon. G. PORTOLESI: You have referred to page 682. You have referred to statements made by my chief executive. I ask you precisely: what were those statements and what were those figures?

Mr PISONI: I told you: '220 or so', as per the Hansard transcript.

The Hon. G. PORTOLESI: Mr Garrand advises me that in terms of our FTEs and savings we are on track, but we will come back with a more precise figure.

Mr PISONI: So you are not able to confirm whether the '220 or so' that the Budget and Finance Committee was advised was the reduction target for 2020 was met, is that what you are saying?

The CHAIR: I cannot quite follow why you are asking questions about budget and finance when this is about the Auditor-General's Report.

Mr PISONI: The Auditor-General's Report specifically relates to employee numbers and employees in the department.

The CHAIR: You need to keep referring to budget papers.

Mr PISONI: Page 682, sir, which I referred to before I asked the question.

The Hon. G. PORTOLESI: In the spirit of trying to be helpful to the member for Unley, I understand the meeting to which he refers was held a while ago, and he would appreciate (and he supported the legislation) that we have been in the process of disentangling TAFE from DFEEST. I have to say that is going very well. But I can report that my advice is that the 2012-13 FTE analysis for the DFEEST portfolio (inclusive of TAFESA) had an FTE level as at 30 June 2013 of 3,251, against an approved FTE cap of 3,255.

Mr PISONI: Can you advise how many of those 220 were earmarked for TAFE and how many for DFEEST?

The Hon. G. PORTOLESI: We would need to double check that breakdown.

Mr PISONI: It is the same page—

The Hon. G. PORTOLESI: What is that page sir?

The CHAIR: Page 682.

Mr PISONI: What was the budget savings figure for 2012 and was the budget amount met?

The Hon. G. PORTOLESI: The DFEEST portfolio had an incremental savings task of $13.7 million in 2012-13.

Mr PISONI: And TAFE?

The Hon. G. PORTOLESI: That includes TAFE.

Mr PISONI: Mr Garrand told the Budget and Finance Committee on 15 April that that savings target was $47.9 million, so why is there a discrepancy?

The Hon. G. PORTOLESI: The figure I referred to was the incremental savings task.

Mr PISONI: Turning to page 685 there are the corporate services recharge to TAFESA under your 'Fees and charges'. Is TAFESA able to buy those services from elsewhere other than from DFEEST?

The Hon. G. PORTOLESI: Presently there is an arrangement with DFEEST but there is a brand-new board at TAFE—a brand-new chief executive, a new Chief Financial Officer, John O'Dea, who has been in the job for 45 days—he is not counting! So I cannot speculate on what might happen in the future but what I can say with confidence is that the board and the executive team is looking at all of these issues. So for now we have an arrangement, but who knows what the arrangement might be into the future.

Mr PISONI: What are those services that are recharged to TAFE?

The Hon. G. PORTOLESI: Things like HR, ICT, legal, infrastructure. But corporate services and infrastructure are recharges.

Mr PISONI: I take you to page 687. The non-current assets held for sale include land at fair value and buildings and improvements at fair value on cost. Can you identify those assets and when they are expected to be sold?

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

Mr PISONI: This refers to page 656. The Auditor-General has identified that DFEEST were unable to provide the Auditor with an instrument of delegation over approval for training subsidy rates and changes made to training subsidy variables throughout the year. He is referring to Skills for All expenditure in this item. We know that since Skills for All was introduced there have been a number of major changes to fund the training lists—since July 2012. On 17 September caps on enrolments were applied to six courses. On 19 November, 22 superseded qualifications were removed from the funding list. Are you able to advise why 22 qualifications were removed less than six months after they were placed on the funding list, and what were the reasons for putting them on the funding list in the first place?

The Hon. G. PORTOLESI: There were a number of universes canvassed in that question, I have to say, so I am just going to attempt to address some of the issues I think that the member was raising. The first one is in relation to an instrument of delegation—I think that was mentioned. I can report that DFEEST and TAFE take their relationship with the Auditor-General very, very seriously, as do I. DFEEST will develop an instrument of delegation to clarify accountability for the management of training subsidy rates and other pricing variables such as payment hours. We are likely to land on this instrument in coming weeks.

In relation to Skills for All, there is no question that it has been a resounding success. It has been a very big year of enormous change, first with the TAFE reform and moving to the one TAFE, which I think has been very good and managed very well. We then had the rollout of Skills for All and our election commitment of delivering an additional 100,000 training places by 2016. I reported to the house that South Australians have responded to the significant number of course choices and offers through Skills for All, generating a 43 per cent system-wide increase in enrolments when compared to the same period in 2011. Interestingly, training growth in South Australia is five times the national average, at 16 per cent in 2012, compared to 3 per cent nationally.

The thing about Skills for All is that it is working. Training is being effectively targeted and directed to areas of strategic need. Enrolments have increased by 13 per cent for Aboriginal people, 38 per cent for people with a disability, 32 per cent for people from low socioeconomic backgrounds, 51 per cent for females, 37 per cent for young people, and 49 percent for people aged over 55.

Mr PISONI: Point of order: the question was: why were 22 qualifications superseded from the funding list less than six months after they were placed on the list? That was the question.

The CHAIR: I do not think there was any point of order. The minister can continue her answer.

The Hon. G. PORTOLESI: Because our training needs to be targeted. I do not have the statements in front of me, but I think the members opposite in the last few months made the same reflection: our training needs to be targeted; so that is what we are doing. It is a matter of offering the training. We then consult, gather industry intelligence, and we speak to providers in the sector. It is going to be a case of adjusting the training effort, but the point is that there is a massive training effort—and, if you do not believe me, look at the figures. The figures speak for themselves.

In the short period that I have been in this portfolio, I have to say that on at least two occasions that I can remember national figures have pointed to South Australia and the reforms undertaken by this government in relation to training and Skills for All and said we are leading the nation. I think we can be very proud of the effort, and I believe that training has to be targeted. So, sure, there are going to be caps, subsidy changes, discussions and consultations on the funded training list, as there should be, so that it can be effectively targeted.

Mr PISONI: This is the same page number, sir.

The Hon. G. PORTOLESI: What was that page number?

The CHAIR: Page 656.

Mr PISONI: How do you measure the Skills for All employment outcomes? In other words, how do you measure those who have participated in Skills for All gaining employment?

The Hon. G. PORTOLESI: There are a couple of measurement tools. We only have a few minutes left so I will not go through them, but one is through the National Centre for Vocational Education Research (NCVER) and the second is that we have our own survey mechanism. The advice Mr Garrand has just given me is that 90.1 per cent of South Australian graduates are satisfied with their training and 88 per cent gain employment or go on to further study, so that is a pretty good result. There is the NCVER, which is external to South Australia. They are NCVER figures. So, there are those external measures on our performance. I have to say, whether they go on to employment or further study, both are good results for our students who are undertaking training.

Mr PISONI: Do you measure how many go on to employment in the area in which they have received their Skills for All funding? If so, what are the figures?

The Hon. G. PORTOLESI: I am advised that we do.

Mr PISONI: 'What are the figures?' was the next part of the question.

The Hon. G. PORTOLESI: I don't have those figures with me. We are in the middle of a survey period.

Mr PISONI: Will you provide them?

The Hon. G. PORTOLESI: I would like to look at them first. I would like the survey to be finished before I determine whether I can give them to you.

The CHAIR: Can the member stand if he has a question, please.

Mr PISONI: Thank you, sir. I refer to page 671, the agency objectives and funding. There is a reference there that DFEEST is responsible for the regulation, administration and funding of apprenticeships and trainees. Specifically to apprenticeships, are you able to advise how many started apprenticeships in the Auditor-General period of 2012-13 and how many completed apprenticeships in that period?

The Hon. G. PORTOLESI: We need to confirm the figures, but for that period Mr Garrand advises me that there were about 12,000 commencements. We can bring back those figures. I will ask my officers if they can find some information that I can read out—that would be useful. We have that information, it is just a matter of getting our hands on it.

Mr PISONI: Specifically apprenticeships, not trainees. I think you will find that figures is closer to 3,000.

The Hon. G. PORTOLESI: We will get that information for you specifically in relation to apprenticeships.

Mr PISONI: Again on page 671, DFEEST has just commenced a detailed review of most of its programs. Comparative reviews, I understand, will be conducted in all programs under three categories: Aboriginal programs; skills development and employment participation programs; industry and business programs. I understand this will be an internal review. Could you advise who you will be consulting during your review of those categories?

The Hon. G. PORTOLESI: Thank you, sir; I am happy to answer that question, but to which page does he refer?

The CHAIR: Which page number, please?

Mr PISONI: Page 671.

The CHAIR: Page 671.

The Hon. G. PORTOLESI: Sorry, I am having trouble following; which area of 671?

Mr PISONI: Agency objectives.

The Hon. G. PORTOLESI: Yes, there is an internal review going on, and it is for internal purposes.

Mr PISONI: The question was: who will you be consulting?

The CHAIR: Stand if you have a question.

The Hon. G. PORTOLESI: The programs that are being reviewed belong to the agency, and so the review will be undertaken primarily inside the organisation; it is an internal review.

Mr PISONI: So you will not be consulting any stakeholders—anybody that receives those services from DFEEST?

The Hon. G. PORTOLESI: No, not in the first instance. We are always in the process of engaging with industry sectors and training providers—always. The Training and Skills Commission does the same thing. This is a review for internal purposes, and then we will see where we take it from there.

Mr PISONI: Can you explain why the scheduled Skills for All review has been delayed?

The CHAIR: The same page number?

Mr PISONI: Yes.

The Hon. G. PORTOLESI: Sir, I need to seek clarification as to which review he is talking about.

Mr PISONI: Skills for All. Skills for All is due for a review this year. That has not commenced; could you explain why?

The Hon. G. PORTOLESI: The reason why I sought clarification is because we are always in the process of reviewing the funding training list—it is a matter that he referred to earlier. That is always under review; that is to ensure that the training offer is targeted. Is that what he is talking about? I am not sure. Is that the review to which the member for Unley refers? If he has other information—

Mr PISONI: My understanding is that, just as you are reviewing other areas within the department, there is also a review—when the legislation was set up for Skills for All, when the program was designed, there was going to be a review due around this year, after the first 12 months of the review. Are you saying there was no plan to have a review of the Skills for All program?

The Hon. G. PORTOLESI: I gather the member is asking for a review of Skills for All. Is that what you are doing?

Mr PISONI: Everyone would love one; it is a disaster.

The Hon. G. PORTOLESI: But you supported Skills for All, and you supported TAFE becoming—

Mr Pisoni: It's the way you are managing it.

The CHAIR: Order!

The Hon. G. PORTOLESI: —a statutory organisation—

Mr Pisoni: It is the way you are managing it, minister.

The CHAIR: No, the member will sit down. The member for Unley will sit down; he will not stand while the minister is on her feet, thank you. He should know better.

The Hon. G. PORTOLESI: Thank you, sir. My priority for now is to ensure that our training effort is targeted and is meeting the needs of industry and business and also meeting the needs of students. So, that is the priority for now: ensuring the funded training list is hitting the mark. In terms of commitments that were given in the past to review Skills for All in the context of it being a new initiative, of course, but my priority for now is to ensure that the funded training list is right, and that is what we are doing. That is a review that is underway at the moment.

Mr PISONI: Can you advise who you have consulted with on the funding caps that were imposed during the 2012-13 Auditor-General period?

The Hon. G. PORTOLESI: The department undertakes very wide and very deep consultation. We consult with industry, business and organisations like ACPET. I would not have that information with me, but Mr Garrand advises me that the department received, at some stage, over 70 submissions; we welcome that. We thank people for their contributions, and we thank them for their patience as well. Skills for All is a relatively new policy coming at a time of enormous organisational change with TAFE, so we understand that it is a period of some flux, but we also think it is important to engage with people about what they think that the training effort should be.

Mr PISONI: So, what you're saying is that people are not invited in the review? Is there a formal submission process where industry are asked to participate in the review of caps?

The Hon. G. PORTOLESI: The consultation process was very constructive. After considering the feedback received from over 70 submissions and over 40 forum participants, changes, for instance, were made to the funded training list to ensure that training leads to jobs and aligns with industry. I certainly undertook a number of consultations myself and invited people to give me their contributions. I also instructed my department, which they were doing anyway, but I reaffirmed my view that the consultation needs to be meaningful. I met with people like Nick Papahazariakis the other day—he is very good—and John Cassebohm. So, I am always in the process of meeting with people in the sector to ensure that their views are reflected as best we can in the training effort.

The CHAIR: Time has expired. I would like to thank the minister and the member for Unley. That concludes the Minister for Employment, Higher Education and Skills and Minister for Science and Information Economy. We now turn to the Minister for Manufacturing, Innovation and Trade and Minister for Small Business. Can I remind members when they ask their questions that they reference them to the Auditor-General's papers, please. The member for Waite.

Mr HAMILTON-SMITH: I start by referring to page 1,011 of the Auditor-General's Report where he talks about Shared Services and the CHRIS payroll control environment. I know this is probably a shared responsibility between a couple of ministers, but could the minister just tell us what issues there have been with Shared Services and what action the department has taken to respond to the Auditor-General's issues?

The Hon. T.R. KENYON: A lot of it is spelled out in the Auditor-General's Report. There was a consideration of payroll processes and control environments of Shared Services and the external bureau provider of CHRIS, there was a review of the processes and control environments and, while Shared Services implemented significant remediation during the year, it was not effective throughout the entire year. As such, the process and control environment could not be considered robust. Significant remediation action has just been undertaken by Shared Services, and DMITRE expects that the control environment in the future will be effective. So, they have undertaken their own internal review, but on top of that DMITRE has decided to continue to undertake further checks and controls in relation to its financial operations to ensure the integrity of its financial results as well.

The additional controls that we are undertaking are: monthly monitoring of year-to-date results for all divisions, with a commentary on significant variations presented at DMITRE's hearing at the Budget and Finance Committee; an end of year review by all divisions with information on corrections, accruals, contingencies and commitments provided through the end of year data collection process, with verified legitimacy of adjustments; asset stocktakes performed for all physical assets; reviewed Shared Services reconciliations of key control accounts; conduct agreed upon procedures in overseas offices consistent with previous years; and conduct the annual financial management compliance program to ascertain a level of compliance.

Mr HAMILTON-SMITH: So, can the house take it that the issues to do with payroll processing identified by the Auditor-General and also the issues to do with control environments in the accounts payable and electronic payment areas have been dealt with or will be dealt with by next year? Secondly, are we confident that this entire process of Shared Services has actually saved money, or has it been a net cost, and could you provide some detail on that?

The Hon. T.R. KENYON: I think the house can take it that Shared Services is continuing to run its own internal processes and to review its own procedures in response to the Auditor-General's comments. We work with them to do that, to ensure that, from our end, we are doing everything we can. We have also instituted our own internal reviews, as I just listed off before. In terms of the overall savings of Shared Services, I am, as minister for my part of DMITRE, not able to comment on that; it is probably best addressed to the Treasurer about the level of savings or otherwise of that program.

Mr HAMILTON-SMITH: Page 1012 of the report refers to grants and subsidies. Could the minister update the house, as of today, with regard to what funds for grants and subsidies are operating within the industry portfolio? I know we discussed this in estimates but there has been some time that has passed since, so could you just update us with the name and quantum for each of the funds controlled within this portfolio? Page 1012, and I think there is a figure of $22 million that is listed as grants and subsidies allocated for 2013.

The Hon. T.R. KENYON: Did you mean a list of the programs and the total amount for each one? Yes. Funnily enough, we do not have that particular information here, but we do have a list of all the grants handed out and the details around them, so we have gone into a much greater level of detail but that higher level of just the grant programs we do not have—but I can get them for you.

Mr HAMILTON-SMITH: If I could take that on notice, but I would be happy to hear—how long is the list of grants given; how long would it take to read?

The Hon. T.R. KENYON: Quite long. I will just provide it to you, shall I? I can provide it to you in a letter and that would save everyone's time, I suspect.

The CHAIR: It cannot be tabled apparently.

Mr HAMILTON-SMITH: Or you can provide it to me.

The Hon. T.R. KENYON: I will take it on notice and send it to you. It is not in a table or statistical form, I do not think, so it could not be tabled under standing orders.

Mr HAMILTON-SMITH: In this area of grants and subsidies—and noting that following the collapse of Mitsubishi we have invested quite a bit in Tonsley and in other restructuring funds that were provided jointly by the commonwealth and the state—has the department provisioned any funding in the event (although we all hope it will never happen) that Holden departs in the same way as Mitsubishi has departed? If so, what quantum of funding has been provisioned and what programs would the minister see as being necessary in that unfortunate event?

The Hon. T.R. KENYON: No money has been set aside for that purpose. We are still concentrating on putting our financial resources towards keeping Holden here, and automotive here. In the event that Holden or GM chose to pull out of Australia or pull out of manufacturing in Australia, Toyota would almost certainly choose to go as well, which would essentially see the collapse of the automotive industry in Australia—well, it would be pretty much the collapse. That would see in South Australia anywhere between 8,000 and 13,000 jobs, depending on how it all played out, and nationally between 50,000 and 65,000 jobs, again depending on how that played out, so it would be fairly significant.

The important thing about having automotive manufacturing in Australia is that it gives us a complete supply chain; it is our only complete supply chain. That means going from concept design, through engineering, modelling, tooling, manufacturing, component supply, logistics, retail sales, servicing and then disposal of product at the end of its lifetime. It would be important to look at that supply chain and find out what parts of it are the most strategic to the country and to our state, and to manufacturing in the state, and try to replicate that across the state.

It would also mean helping businesses to diversify, it would mean helping to immediately upskill and train people who have been affected by employment. Given that it would not be an immediate shutdown, it would be over time that they would need to be trained up ready for when the time comes that they complete their work with their employer, there would be an immediate requirement to start doing that, and I suspect we would need to work very hard with current manufacturers to work on that diversification process.

We have not provisioned for that yet; again, we are still focusing on keeping Holden here because the ideal way—it is much harder to recreate something that is less than perfect in a broken supply chain than to keep the whole supply chain here, by keeping automotive. That is our goal—as you heard in question time today.

You would have read in the media that there is an urgency about it, we believe. The big danger here is that Holden has one timetable and the federal government, for its own political purposes, has another timetable, and those two timetables will not work together, the end result of that being that Holden leaves and that could have been avoidable. It may well be avoidable if there is some flexibility in approach.

Mr HAMILTON-SMITH: Given that there is no money provisioned, I gather any money for such a task would need to come from budget head room somewhere. Based on our experience with Mitsubishi, does the minister have any idea what impact a departure of Holden might have on the budget and, therefore, on those statistics reported upon by the Auditor? How much does he think we would need to provision, perhaps in grants and subsidies or in some other restructuring part of the budget, for such an eventuality? Is there a figure that the government has in mind?

The Hon. T.R. KENYON: No, we do not have a figure in mind. In the event that we lost Holden, we would be looking for some assistance from the federal government in a similar way that they have assisted Geelong with the announced closure of Ford. We have yet to put a figure on that amount, on what would be needed. Given the experience with Mitsubishi, it would be in the tens of millions, but we have not landed on a final figure yet.

Mr HAMILTON-SMITH: Going back to the question of funds, and I thank the minister for offering up those grants that have been given and providing the other information—

The CHAIR: Is this the same page number?

Mr HAMILTON-SMITH: Yes, grants and subsidies. Could the minister update the house on manufacturing works? We have noted that includes an innovation voucher program and a cleantech partnering program in the eco-innovation area, but could he tell us how much in total is being expended on manufacturing works, and exactly where within the department's budget line is that money being taken?

The Hon. T.R. KENYON: The manufacturing works budget is around $11 million—I think it is $11.1 million. You mentioned the cleantech fund: that ceased on 30 June this year. We have the innovation voucher program, which is $1 million, half from DMITRE ($500,000) and half from DFEEST. There are other grant lines associated with that.

I do not have here spending associated with manufacturing works individually itemised. When I provide you with grant programs, as I said I would, you will see a lot of that is tied up in there. I will give you the breakdown of the grants, so you will have that in there. We will also take on notice that further detail about the funding on manufacturing works and where that spending is at precisely, and on each of those components of that.

Mr HAMILTON-SMITH: Page 1024 refers to income and specifically mentions land sale proceeds. It notes that on 10 May 2004, cabinet approved the transfer of land from Edinburgh Parks (Stages 0, 1 and 3) to the Urban Renewal Authority and that, in accordance with the contractual agreement, the department is entitled to receive 25 per cent of the net profit arising from the sale of those lands. All income is recognised on sale of that land. Can you confirm to the house what income you have received and has that 25 per cent been banked? Has it been received?

The Hon. T.R. KENYON: There was no money received in the financial year 2012-13. We can get the total amount for you from 2004—the year-by-year breakdowns from that point. I will take that on notice and get back to you with an answer on that one. But for this financial year it is precisely zero.

Mr HAMILTON-SMITH: Just going to the Gateway program and TradeStart program, could the minister update the house on how much is being spent in this financial year on those programs and what is planned going forward?

The Hon. T.R. KENYON: DMITRE's net contribution to TradeStart in 2012-13 was $331,000 and there is a contribution of $338,000 from Austrade. There is an existing tender arrangement between DMITRE and Austrade which is a multiyear contract in its final year this financial year. You would have heard in question time today I announced some changes to that Gateway program that should make it easier to get grants and increase the amount of programs or activities that are available for Gateway funding.

Mr HAMILTON-SMITH: Of those investments listed in your report in trade and investment, are there any other funds or any other expenses that you are making in the trade and investment area other than those two programs?

The Hon. T.R. KENYON: There are the two programs that you mentioned, and there is also some spending in developing the China and India strategies. We have appointed a director of China, Director Li Jing; and we have just appointed a director of India as well, Raju Narayan, who the member for Waite would have met in India. Obviously we have been on trade missions, along with Premier, into China. There is the money we spend on Brian Hayes and Sean Keenihan, who are our special advisers to India and China respectively. Dr Alfred Huang does some work for us as well. He largely performs his duty ceremoniously and he sits with Chinese inbound delegations, and he helps us with cultural stuff from time to time.

Mr Hayes' remuneration package is $175,000 per annum, plus $10,000 for administrative expenses per annum. Mr Keenihan's is $100,000, and he has the same travel, accommodation, and entertainment commissions as Mr Hayes. Dr Huang's 12-month package is $500 per day for a maximum of 40 days per 12-month period, with the same travel accommodation and conditions that apply to the other advisers. That would be pretty much the level of what we spend. We have resources in Shandong—Jinan in Shandong—and the office in Shandong. I do not have a dollar amount on that for you, but I can get it if you want.

Mr HAMILTON-SMITH: No.

The Hon. T.R. KENYON: Okay. There is an office in Hong Kong that also assists with that. In DPC and funded through DPC is the Office of the Agent-General in London as well.

Mr HAMILTON-SMITH: So we have an Austrade person now in Mumbai?

The Hon. T.R. Kenyon: Yes.

Mr HAMILTON-SMITH: Funded, going forward. Do we have a funded Austrade person in Shanghai, or anywhere in the Middle East, and going forward? Have we yet put anyone in there, and do we have those positions covered?

The Hon. T.R. KENYON: You are correct: we have someone embedded in Mumbai. We are trying to find someone for Shanghai. We have funding for that, but we are trying to find the person. We have done a round of advertising and interviews, and we have yet to appoint someone. We have not appointed anyone in Shanghai yet, but we are searching to fill that role. In the Middle East, no, we do not.

Mr HAMILTON-SMITH: Can the minister update the committee on the strategic industry development fund? Is that fund still active and how much is in it? And the South-East South Australia innovation investment fund?

The Hon. T.R. KENYON: The detail of that will be included in our response to an earlier question listing off the funds, but they are both active and they both continue. The yearly budget for the Strategic Industries Development Fund is $2 million per year. The south-east one I do not know off the top of my head and we will have to get that for you.

Mr HAMILTON-SMITH: Have senior executive positions recently come up for contract renewal, have any of those positions been renewed recently, do those renewals provide job certainty for those senior executives going out for a period of years and, if so, how many people and how many years?

The Hon. T.R. KENYON: Do you have a level in mind? Are you talking about all executives?

Mr HAMILTON-SMITH: Anything above $100,000 or thereabouts.

The Hon. T.R. KENYON: I am not sure about the signing of contracts. What I will do is take that on notice and find out for you. That is a matter for the chief executive. I am told that the executive level starts at $138,000, so I will take it from that point up. There has been a change in the total number of employees. There is a total in 2012-13 of 51 DMITRE employees who receive remuneration above that level of $138,000. That is up from the 14 DTED employees in 2011-12.

That encompassed the changes in bringing DTED together with the minerals and energy section from PIRSA. The blending of those two departments has taken it to that number of 51, so there was a net increase of 38, and 32 of those were part of that merging and a result of the machinery of government changes. The remaining five employees—so, 32 came in and five were new or reached the reporting threshold for the first time in 2012-13. As to the renewal of contracts, I will get back to you with that.

Mr HAMILTON-SMITH: I thank the minister for that.

The Hon. T.R. KENYON: Sorry, it was 37 not 38.

Mr HAMILTON-SMITH: I would be interested to know, of the 37, how many have recently had their contracts renewed. I am getting information that quite a number of them may have been renewed for five years or so—I think the normal term is five years—just so that the house can be informed. I have one final question. Is the South Australian Small Business Innovation Research Pilot Program still active, how much money is there and what other programs are active in the small business portfolio space?

The Hon. T.R. KENYON: To go back to the renewal of contracts—again, we will take that on notice and get back to you with that—that is a matter for the chief executive as to whether they are renewed or not, so obviously I would have no involvement in that. Generally, I imagine if they have come up it is just the turnover of contracts, assuming that they have met all their KPIs and everything else.

The first part of the small business innovation fund was half a million dollars to work with SA Water. The specific project was to find a process that would remove primarily nitrogen but also phosphorous from treated wastewater. That process is underway. They have received proposals where they are prepared to spend up to $100,000 on the development of five prototypes.

We announced stage 2 as part of the budget, and that involved taking two of those five, after assessment, to the next level of commercialising them, essentially, and making them available for use by SA Water and also for sale to other users of those products. The second pilot will be with SA Health, going back to that first stage of seeking interest in solving a particular problem. We do not know what that is yet, but if we find out that detail we will try to get that to you.

The CHAIR: I thank the minister and the member for Waite.

Progress reported; committee to sit again.


[Sitting extended beyond 17:00 on motion of Hon. T.R. Kenyon]


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