HANSARD
SITTING CALENDAR
SEARCH
LIVE BROADCAST
Hansard Dynamic Subject Index
House of Assembly - Fifty-Third Parliament, First Session (53-1)
2014-10-30 Daily Xml
Contents
Pdf Xml

Auditor-General's Report

Auditor-General's Report

In committee.

(Continued from 28 October 2014.)

Mr VAN HOLST PELLEKAAN: I refer to Part B, Volume 2, page 450, contingent liabilities. In reference to the agreement indemnifying the commonwealth from any third party losses or damages arising from a failure by the state to complete the common user facility and in accordance with the agreed design and schedule or meet the agreed performance criteria, are you aware of any potential claims of this agreement?

The Hon. M.L.J. HAMILTON-SMITH: The quick answer to the member for Stuart is no. Defence SA has recognised a contingent liability with respect to a claim from ElectraNet for additional unforeseen costs associated with the undergrounding of powerlines on Mersey Road. To elaborate on that, Defence SA engaged ElectraNet in 2011-12 to place underground a section of a 66kV powerline along Mersey Road to facilitate the transfer of large items from the Techport Australia common user facility to the CUF expansion across Mersey Road. Following completion of the works in November 2012, ElectraNet lodged a claim for additional unforeseen costs associated with the contracted works. Defence SA is disputing the claim, which remains outstanding, but such events are not uncommon in the normal course of business.

Mr VAN HOLST PELLEKAAN: What is the size of that claim that is in dispute?

The Hon. M.L.J. HAMILTON-SMITH: There is some uncertainty as to where that will land, but my advice is that a figure of around $300,000 was the opening point, so it will be at some point around that.

Mr VAN HOLST PELLEKAAN: Same volume, page 442—Defence Industry Development. Has the review of South Australia's defence strategy been completed and handed to the minister in early August, as per advice to the house during budget estimates back in July 2014?

The CHAIR: What page are you on, member for Stuart?

Mr VAN HOLST PELLEKAAN: Page 442.

The Hon. M.L.J. HAMILTON-SMITH: Yes, progress on that has been considerable. I have seen a draft, but I have held that over for a moment while we deal with the more pressing issue of the defence white paper submission. The consultation was linked to the summit, and one or two other pressing matters needed attention in first order. I would expect, however, that that strategy will be through cabinet very soon, and that you will certainly see it before Christmas.

Mr VAN HOLST PELLEKAAN: Just for clarification, are you not the recipient of the strategy?

The Hon. M.L.J. HAMILTON-SMITH: I think the strategy to which you are referring is the government strategy, so it will be a strategy of government that will be made public.

Mr VAN HOLST PELLEKAAN: Now that, as was announced today, the government submission on the white paper has been put to the federal government, how much longer do you estimate it will take to get this strategy completed, presented to you and made public?

The Hon. M.L.J. HAMILTON-SMITH: I have seen drafts already—fairly advanced drafts—so I do not think it will be long at all. I cannot give you a date, but I would imagine we will have action on that within a month.

Mr VAN HOLST PELLEKAAN: The next page is 443, and the reference is consultants. What additional consultancy work was done by Defence SA to explain the increase in expenditure from 2012-13 to 2013-14?

The Hon. M.L.J. HAMILTON-SMITH: Full-year spend in 2013-14 on consultants was $399,000, predominantly for strategic advisory services in relation to positioning Techport Australia as a strategic contingent facility for US Navy Voyage, emergent repair and maintenance and crew R&R. This is something we have been pursuing for some time.

When a contract is executed during the year, in accordance with the Department of Treasury and Finance accounting policy framework, Defence SA assesses whether the engagement is a contractor or a consultant, Defence SA expenditure on consultant services generally for specific strategic policy advice, industry surveys or economic modelling. Recent and forecast expenditure is as follows: 2012-13, $224,000; 2013-14, actual expenditure was $399,000; and budgeted in 2014-15 is $82,000.

In 2013-14, consultant expenditure of $399,000 was largely to US-based Fletcher Rowley Inc., with $359,000 paid to them to provide strategic advisory services in relation to positioning Techport Australia as a strategic contingent facility for US Voyage and emergent repair and maintenance, as I mentioned earlier. That consultancy has now concluded. The US Voyage repair strategy is ongoing, with Defence SA in dialogue with the US government and navy representatives on the matter.

Mr WHETSTONE: We will start off on page 1151, Volume 3, Overseas representative officers, in reference to where the department funds their operations. What were the final costs, including contractor and audit fees, to close the Singapore, Dubai, Shanghai and India offices in 2012-13, as stated in the report?

The Hon. M.L.J. HAMILTON-SMITH: Net expenditure for overseas offices was $0.462 million in 2013-14 and $1.026 million in 2012-13, which was a decrease of around $0.564 million. The main reason for the reduction in that expenditure is due to the closure of the offices the member mentioned; hence, operations were only part of year.

The Dubai office closed on 30 September 2012, the Singapore office on 30 September 2012, the India office on 31 January 2013, and the Shanghai office in China closed on 30 June 2013. Although the Shanghai office was formally closed on 30 June 2013, two staff members remained, one until the end of December 2013 to assist with the post closure tasks, and a second staff member until 30 September 2013, when her statutory maternity leave ended.

The main reason for the increment in net expenditure in China is due to the engagement of a Chinese legal firm, approved by the Crown Solicitor's Office under Treasurer's Instruction 10, to assist in the closure of the Shanghai office; there are some licensing requirements that need to be dealt with carefully. The Jinan office in China will remain open as the only stand-alone office SA maintains in China. The costs relating to the overseas representation provided through Austrade are not included in these figures I have mentioned; these costs are shown elsewhere in the budget papers.

Mr WHETSTONE: What overseas SA-only trade offices does the government now operate?

The Hon. M.L.J. HAMILTON-SMITH: We have an office, as I mentioned, in Jinan, in Shandong Province. We have, as you know, an office in London, the Agent-General's Office, but that falls under the administration of the Premier. It does work for us but we do not account for it. Our other overseas representations are in Shanghai, where we have a person placed with Austrade, at the Shanghai office, if you like, administered by them, but we fund that single position: they work for us but with Austrade. We have a similar arrangement in Hong Kong, where we have a person. We have put someone into Mumbai, imbedded again with Austrade. So, it is just the three: Mumbai, Shanghai and Hong Kong. But, of course, we are considering the South-East Asia strategy at the moment, and obviously under consideration is where we might place someone in South-East Asia and we have not reached a landing on that at this point.

Mr WHETSTONE: The spend on operating overseas trade offices has reduced from $1.249 million in 2013 to $492,000 in 2014. Are the savings from the reduction of those spendings on overseas trade offices being redirected to other trade and export-related expenditure?

The Hon. M.L.J. HAMILTON-SMITH: I will have to come back to him with a detailed answer on that specific amount, but I will just say to him I am reviewing all of the budget arrangements within this portfolio at present.

We are only talking a relatively small amount of money in budget terms at about $21 million. Frankly, as you could probably gather from what I am saying, I would be arguing that perhaps we need to put a bit more effort into this area. As a matter of interest, I recently added up the amount the government was spending on a raft of economic portfolios and looked at that as a percentage of government's overall spending effort, and it is quite a small percentage, yet this is the area that generates the wealth and the income from which we drive other services. I assure the member that if there are any dollars saved as a result of the closing of offices, I will make sure that we apply that expeditiously to other programs.

I think there is a lot of work to be done to create jobs, particularly in the regions, like in the member's electorate where there is so much opportunity yet to be realised and there are so many producers who probably could export but need a bit of a hand or a bit of encouragement. Whatever dollars we have that we have saved will be deployed appropriately. I will seek an answer specifically to what happened to that amount of money as a result of the closure of that office and how the balancing items work with regard to our embedding of people with Austrade and come back to the member.

Mr WHETSTONE: Moving on to Volume 3, page 1151, under Commonwealth Revenues. There is a line that refers to TradeStart, and an explanation on the following page reads that the trade agenda for this funding agreement, a period of approximately 3½ years, ended on 31 August 2014. Initially it was 30 June 2014. Can the minister explain why the funding agreement deadline was extended and what the funding agreement is with TradeStart, given that the current one ended on 31 August?

The Hon. M.L.J. HAMILTON-SMITH: This is a pretty interesting program, TradeStart. The former DMITRE's net contribution to TradeStart in 2013 was $301,000 with a contribution of $321,000 from Austrade. DMITRE's net contribution to TradeStart in 2012-13 was $331,000 with a contribution of $338,000 from Austrade. This is based on the existing tender between DMITRE and Austrade which is in its final year. We have just successfully renegotiated that arrangement for an extended term.

It is a key mechanism for the commonwealth and the state to cooperate in promoting trade effort. I want to say how impressed I have been in the short time I have been the minister with the activities of Andrew Robb, the federal minister, who has got all the trade ministers from the various states together under a Team Australia approach in a whole host of ways ranging from the B20 to other conferences. He is working very hard to get the states harnessed around the commonwealth's more broad agenda because we have resources deployed, and I think Austrade falls within the ambit of that.

The Department of State Development uses that money under commonwealth guidelines to employ five export advisers to cover the state. They are in various locations; I think one of them might even be in the member's area. They do a pretty good job on our behalf. We have a TradeStart adviser in the north and west of SA, a TradeStart adviser in the South-East. We have a 0.5 position also in the South-East, we have two in the city, a lot of them working in the regions and helping people in the regions, so it is a pretty successful program. They are helping quite a lot of people, and that has all been reported on in the budget.

I am reasonably happy with the way that is working, but I am asking my agency if we can do things better, particularly in regard to working more cooperatively with business associations and the business sector more generally to get better access to farmers and small businesses that might need help. Again, this is an area that I am reviewing to see if we are getting maximum bang for buck, and I will be very happy to brief the member on what we are doing there at a convenient time.

Mr WHETSTONE: Just on that, is there an Austrade officer on Eyre Peninsula?

The Hon. M.L.J. HAMILTON-SMITH: The five export advisers who cover this state, I am advised, are based, as I mentioned, in the Adelaide CBD and suburbs, where there are two. In the Riverland, there is a 0.4 position, and in the Limestone Coast and Upper Spencer Gulf there is one FTE. I do not see a briefing note here that says there is someone on the West Coast; however, I will check that. I think that is a very good question, and we probably do need to apply some effort there.

As I said, I am just reviewing all these people at the moment to see if they are engaged. It may be that the two FTEs we have based in Adelaide at Hindmarsh Square in the investment and trade agency are actually working with people on the West Coast. It may be that, although they are not physically located there, they might be very effectively engaged there. I will report back to the member on what activity we have had with businesses, farmers, industries on the West Coast and send that information to the member.

Mr WHETSTONE: I remember at estimates I asked you that question, and you said that you were going to look at it, so I urge you to look at it because that was some time ago. Given that South Australian Austrade offices have exceeded targets in previous years, has the state government considered expanding regional office hours? For instance, we have 0.4 in the Riverland. Would you consider the merit of engaging officers with more time?

The Hon. M.L.J. HAMILTON-SMITH: First of all, I thank the member for reminding me about budget estimates. I will just send a signal to my agency through Hansard that I will be asking for a report from them on any questions I have not answered; I will make sure that I come back to you on that. Yes, we would be prepared to consider new approaches in the Riverland and elsewhere. My question to the agency is: where do we need to put the TradeStart officers to get best bang for buck, to get best performance?

The question I am asking them is: do we need to put more people out into the regions and say, 'Here we are, come and see us, we are here to help,' or would we be better to partner up with organisations more effectively, like Food SA, rural producers or primary producers associations, Business SA, certain industry associations, or even couple up more effectively with RDAs or with organisations that have a membership base who can then feed our information and services out to a distribution list of people?

I am just asking that because it raises the question: do you need to physically be in that particular region to get to a lot of businesses in that region, or would a better model be to be central, contact them all electronically or physically, then go out and visit on a mobile basis at various times and then come back to a central point? I must say that I am attracted to the idea of working more effectively with rural industry associations. I think Food SA do a great job. I have also met with Rob Kerin, and I think his organisation has reach as well. I am just asking whether we can get our TradeStart officers to work even more effectively with those organisations and by so doing get out into places like the Riverland more effectively than we are at the moment.

I am just a new minister with a fresh set of eyes asking all those questions over again. I am very happy to come back to the house once that process is complete with some fresh approaches on TradeStart. Obviously, we will need to consult with the commonwealth on that because their money is deployed and they place certain requirements on us, so whatever we do we will have to comply with the commonwealth's wishes, but we are working on it.

Mr WHETSTONE: Thank you for that, minister. I refer to Volume 3, page 1166, Transactions with SA government—Expenses, and $16,000 was expended to the SA government on overseas trade representation in 2014. Can you outline which SA government organisations received the $16,000 in overseas trade representation funding and what was the money for?

The Hon. M.L.J. HAMILTON-SMITH: I thank the member for that thorough question. My advice is that we would not have that level of information with us today, so I will have to take it on notice and get back to the member with a detailed breakdown of that amount.

Mr WHETSTONE: Also under travel-related expenses, how much money was spent on travel relating to overseas trade missions in the reporting period?

The Hon. M.L.J. HAMILTON-SMITH: Due to the nature of the department's activities, overseas travel is a common occurrence, of course, because it is the agency for trade and investment. I am advised that several trips were undertaken to achieve agency-wide benefits and involved key officers from various areas across the agency. This has resulted in individual trip spending in different ministerial portfolios.

As a result, the details below relate to overseas travel for the entire department, and I will mention them in a moment. Costs relating to the minister, the minister's staff and others include airfares, accommodation, meals and travel, while costs for the departmental officers also include salaries. The activities we undertake are consistent with Premier and Cabinet Circular 013 annual Reporting Requirements. Costs for travel to New Zealand are not included.

The cost of overseas travel incurred by the department during 2013-14 for departmental officers was $860,980. For a minister or minister's staff and other persons, it was $175,126. Thus the total cost for overseas travel in 2013-14 was $1.036 million compared with $994,000 in 2012-13. The number of trips, by the way, in 2013-14 of all natures was 39, with 34 trips in 2012-13. The average cost of a trip in 2013-14 was $26,567, which was less than the average cost of trips in 2012-13, which was $29,254. That is the broad information.

Can I just say that this again is an area where the government is conducting a review. The Premier has an excellent grasp on this issue and wants all ministers to coordinate and synchronise their activities so that if, for example, the minister for education is in India, when they come back there is a proper debrief and then, when the minister for primary industries goes two months later, there is a handover and they are able to connect up again with the officers and representatives in country in the full knowledge of what preceded you. This is an area where we want to go even further.

It is also apparent that we could probably improve the regularity of our travel, perhaps even make travel to certain destinations at the same time each year. In that way we could communicate with primary producers, industry and industry associations and give them a bit of notice so that in June every year we could go to one particular destination, in October every year we could go to another destination, and they could budget and prepare and plan.

So we are reviewing this but, if we want to engage, we do have to travel, we do have to get over there, we have to do things. Can I also say that we are very heavily engaged with Shandong Province at officer level, with a high-level engagement approach where we are sending over senior officers from our agencies to work with senior officers in China doing all sorts of things. That has partly resulted in such an amazing outcome in the last few years, with our trade to China virtually tripling. So, we are getting dividends.

That is the other thing I would like to measure: the product of such visits and such activity. I think if we do it well and invest well in that travel, we can get a dividend back for South Australian businesses, and that is a good thing.

Mr WHETSTONE: On the same page, under Grants and subsidies, expenses, can you outline the total applications and grant spending for the Gateway Business Program in this financial year and advise what is planned for the program going forward?

The Hon. M.L.J. HAMILTON-SMITH: This is another program I am taking quite a keen interest in with a view to asking whether or not we can get more juice out of the engine, so to speak—and I know the member will be comfortable with that term. The Department of State Development offers funding of up to $25,000 over two years for eligible South Australian exporters, mostly small to medium-size enterprises, to support export market development activities for their businesses.

Given the challenge of the export environment and exporters' focus on the domestic Australian market over the last three years, the gateway budget has been revised and refocused on a number of occasions. Personally, I am not convinced that we are actually getting as much value out of this program as we could be. I think some of funds have been underdeployed in some years going back in time for various reasons, perhaps because the rules have been a little stringent. There is a range of reasons, so I am just reviewing that to see whether or not we can deploy more funds and even grow the size of that particular program.

Actual spend in 2013 was $95,476. The Gateway Business Program involves competitive grant application processes and a strong focus on preparing companies for export. The grant was originally announced, as the member would know, back in November 2010. Companies are expected to match the 50 per cent funding offered under Gateway should they be successful in obtaining a grant, and individual activity caps range from $2,000 to $10,000. Again, I think it is a good program, but it could always be improved and we are working on that.

Mr WHETSTONE: Moving back to Volume 3, page 1149 of the report, the number of employees in the department for 2014 was 58, with 28 TVSPs or early termination payments in 2013-14. How many of those staff worked directly under the umbrella of the Globally Integrating the South Australian Economy program?

The Hon. M.L.J. HAMILTON-SMITH: I will be answering the member, but one thing I have noticed is that, as a minister, you get copious quantities of chopped-down trees in the form of binders full of paper. Can I say that under the investment, trade and strategic project operations area we have around 18 FTEs; in the TradeStart area, around four; in the population policy area, around six; and in the immigration area around 10. That is a rough figure, but it is a fluid thing.

I will have to come back to the member with a detailed breakdown of exactly what numbers are deployed under which specific programs. A bit of restructuring and reorganisation has gone on in the past 12 months, with possibly more coming as a result of the creation of DSD from the former DMITRE, so there has been quite a bit of shifting around. We are just steadying that down at the moment, and I will probably have more accurate advice for the member in the near future. Employees receiving a TVSP in 2013-14, I am advised, from my agency included two people from Immigration SA, and I think that was it from my agency.

The CHAIR: Having reached the end of our allotted time, I thank the minister and his advisers and request the changeover to the Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Tourism, Minister for Recreation and Sport and Minister for Racing. We are leading off with agriculture, food and fisheries. You could ask the question and tell me what page and we could get ourselves organised.

Mr PEDERICK: In regard to the Department of Primary Industries and Regions, I refer to Volume 4, page 1441. The report notes that 15 of the 119 pay point managers were yet to undertake training, but the department had indicated this would be completed by the end of August 2014. Can the minister confirm if this has occurred?

The Hon. L.W.K. BIGNELL: The audit review of controls relating to the payroll environment highlighted areas to improve existing controls, and those issues have already been addressed. I guess that is the good thing about having the Auditor-General come in and look through departments to pick up on things that can be improved. We have certainly acted on that already.

During the 2013-14 review of payroll processing, audit identified at the time of their audit that there were inconsistent practices in the review of bona fide certificates and leave returns. Audit identified that, while the majority of pay point managers had completed online training, 15 out of 119 pay point managers had yet to undertake the training. I am advised that all current PIRSA pay point managers, including any new managers, have now completed the online training. This was achieved by the end of August 2014, with the training designed to ensure pay point managers understand their responsibilities when reviewing and certifying bona fide certificates and monthly leave returns.

In addition, a report is being distributed every six weeks to divisional business managers to verify the ongoing accuracy of the pay point manager listing and to ensure all new managers have undertaken the online training as part of their induction to the role. PIRSA has also provided to all current pay point managers updated procedures on the review of bona fide certificates and leave returns, reinforcing their responsibilities and the consistent approach of review required by all pay point managers.

Mr PEDERICK: In relation to that, minister, you may have answered most of it in regard to whether the department has a credible process in place to identify new pay point managers and ensure they complete online training prior to approving bona fide certificates and leave returns and, also, exercising human resource delegations.

The Hon. L.W.K. BIGNELL: Yes, that has all been incorporated in the new training and the induction as well for new people coming on board.

Mr PEDERICK: I refer to Volume 4, page 1442. The report recommends that PIRSA review the business needs for officers to have administration access to enter demerit points and consider system or process changes to allow a reduction in the number of officers with this access which the department agreed to investigate. I can say that demerit points is a matter that lies very deep in the heart of commercial fishermen. Can the minister confirm if there has yet been a reduction in the number of officers with administration-level access?

The Hon. L.W.K. BIGNELL: Audit identified at the time of the review of the Primary Industries Information Management System (PIIMS)—which is the system used to manage fisheries licensing activities—that PIRSA considers system or process changes to allow a reduction in the number of officers with administration-level access.

PIRSA subsequently undertook a systems review and has changed the access levels required by a majority of the users for the purpose of entering demerit points. This has reduced the number of users with fisheries administration-level access in PIIMS from 10 to four. This lower-level system access for clerical officers entering demerit points has further strengthened current controls with only senior administrative staff and managers now having administration-level access.

Mr PEDERICK: I refer to Volume 4, page 1444. The report mentions that SARDI did not record milestone reports for November and December 2013 due to unplanned staff absences. Can the minister explain these staff absences and if SARDI is now resourced to deal with future staff absences?

The Hon. L.W.K. BIGNELL: The audit review of SARDI revenue for 2013-14 considered control arrangements implemented by the department and the testing of transactions processed through the standard invoicing system. This highlighted some areas for improvement to strengthen existing controls, and most of these issues have already been addressed.

Mr PEDERICK: With regard to that, you say that most of the issues have been addressed, but is SARDI now fully resourced to deal with future staff absences so these milestone reports are recorded on time?

The Hon. L.W.K. BIGNELL: Audit noted that for the months of November and December 2013 the project by milestone details reports were not issued for divisional review as per the SARDI contract management procedures due to unplanned staff absences, as you said.

I am advised that despite the reports not being produced, the operational staff responsible for monitoring and following up milestone status actions continued with these activities as a matter of routine by using the contract system online in the absence of distributed reports. To mitigate the risk of unforeseen staff absences, a further two backup staff have now been trained in the generation and distribution of these reports coupled with an easy-to-follow instruction sheet.

Mr PEDERICK: I refer to Volume 4, page 1444. As at May 2014, the milestone details report noted 66 milestones totalling about $2 million where no explanation was provided regarding why the milestones were overdue. Of these 66, 32 milestones totalling $1.3 million were more than 30 days overdue. Can the minister provide details of the $2 million worth of milestones not recorded and why no explanation was provided?

The Hon. L.W.K. BIGNELL: I do not have the specific details, but I am advised that this snapshot in time does not reflect any concern over the management of funds relating to these projects but, rather, there are some housekeeping matters that have now been addressed.

The overdue project milestones had been investigated but not documented in the system. The importance of tracking outstanding milestones is acknowledged, and maintaining a complete and up-to-date record of actions has been reinforced with the six relevant administrative staff. Improvements to recording practices have been developed and were implemented with staff during July 2014. In the recent project by milestone details report run in October 2014, all items have an entry to explain any overdue milestones.

Mr PEDERICK: In regard to the overdue milestones, can the minister provide any more detail regarding the processes in place to report the $1.3 million worth of milestones that were more than 30 days overdue?

The Hon. L.W.K. BIGNELL: There are no additional processes being put in place. We just made it clear that the processes that are there have to be followed.

Mr PEDERICK: But just in line with that, minister, what checks have you put in place to make sure that happens? Sometimes these things will just go on and on.

The Hon. L.W.K. BIGNELL: As I mentioned a bit earlier, all the staff were brought together in July to reinforce the proper process that they need to go through. In October, when they ran the project by milestone details report, all the items had an entry to explain any overdue milestones. I think it was probably something that went wrong. It was identified, and it has now been fixed.

Mr PEDERICK: I refer to page 1440 in regard to expenditure, and a review of the systems used by the department and SSSA to process departmental expenditure. The audit found that:

changes to the Basware access levels were only being approved by managers in instances where there was a change in financial delegation, with other changes being approved by the Procurement Advisory Unit prior to being sent to SSSA. This practice was not consistent with the established requirement for approval of all changes by managers

I am only going from memory, minister, but I think this has been ongoing for several years. What procedures are being put in place to tighten this up?

The Hon. L.W.K. BIGNELL: Audit identified at the time of the audit that current practices were not technically consistent with the documented approval procedures for changes to Basware access limits. PIRSA demonstrated that there was no risk associated with the current practice and the controls in place. Audit acknowledged that the current practice was appropriate, and PIRSA updated the procedures for this minor administrative change in June 2014.

Mr WHETSTONE: Did you swap that tie with the minister for corrections?

The Hon. L.W.K. BIGNELL: No, sir, it does not have his name on it.

The CHAIR: Are we moving to another area, member for Chaffey?

Mr WHETSTONE: Yes, I am moving to the Office for Recreation and Sport.

The CHAIR: So, those advisers will need to scurry down the corridor fairly quickly. What is your question page?

Mr WHETSTONE: My question page is 1275, Volume 4. A review of the grants payments function revealed certain areas where internal controls required improvement, including the identification and management of potential conflicts of interest and grant recipients not formally accepting funding within required time frames. Minister, how have you ensured improved identification and management of potential conflicts of interest within the sport and rec grant expenditure?

The Hon. L.W.K. BIGNELL: The Office for Recreation and Sport human resources and funding assessment committees' conflicts of interest information will be cross-checked prior to and after the sitting of the funding assessment committees. Both registers have the full potential conflicts of interest.

The issue raised by the audit was to consider implementing a requirement for funding assessment committee members to make a positive declaration regarding the existence of any conflict or potential perceived conflict of interest. The audit also suggested that the Office for Recreation and Sport implement a mechanism to ensure that any declared conflicts of interest are recorded in the interest register maintained by its human resources section and, further, to consider implementing a formal review of the register, as part of the grant assessment process, to ensure that all identified conflicts are appropriately managed.

The Office for Recreation and Sport does maintain a register of conflict of interest for employees. These are managed annually by a separate policy and are maintained by Human Resources. Separate funding assessment committees are established for each call of grant funding, and each member of the funding assessment committee is asked to identify any conflict of interest. At the time of audit, these systems and processes were independent of each other. The Auditor-General has requested that these systems be cross-matched for members of the funding assessment committees.

Mr WHETSTONE: Minister, how many instances were there in 2013-14 where grant recipients did not formally accept the funding offer within the required time frame, and what penalties are in place if recipients allow the funding acceptance time frame to lapse?

The Hon. L.W.K. BIGNELL: We do not have an answer with us in relation to how many, but I guess it is good to understand that so many sporting clubs are run by volunteers, as you would know because you have a lot in your area as well. So, sometimes when they are faced with the prospect of having to fill in all the forms and do everything right, they do not always hit the time frame. So, what we always do is give them another opportunity to get their information into us, as required, and to work with them.

The Office for Recreation and Sport has a very good reputation throughout the state for working, throughout the whole grant process, with those people who want to apply for a grant, and they make sure that they are not going to miss out by filling the form in the wrong way. We have a lot of understanding for people and a recognition that they are not necessarily government workers who are used to filling in all the forms. We work with the clubs because, at the end of the day, it is their money being returned back to them as taxpayers to help the clubs and their communities.

Mr WHETSTONE: I concur that the Office for Recreation and Sport does have an excellent reputation. Moving on to Volume 4, page 1312. The brief provided by the department for its activities under recreation, sport and racing states that it includes the provision of strategic policy advice to the Minister for Recreation and Sport on matters relating to the South Australian racing industry. How much funding does the state government commit to the racing industry, and how many staff are working in the racing industry field to provide the strategic policy advice?

The Hon. L.W.K. BIGNELL: We have 0.5 of an FTE working in that area, and Sue does a very good job at being across all three codes. As you would recall, back in 2000, under the former government, the racing moved away from government, and its revenue from government is in revenue forgone that we used to get through the wagering tax. So, that money now goes to TRSA, and it is between $7 million and $10 million a year. So, that money that used to come into government now bypasses government with our blessing, so that it can help the three codes of racing through TRSA.

There are no real levers that we have to control any of the three codes of racing anymore, but we do work side by side with them with the issues. When we had the unfortunate death of Caitlin at Murray Bridge a couple of weeks ago, we all jumped in and offered any help across government. Sometimes it might not necessarily be the racing minister who needs to step in and provide help. It might be the planning minister, it could be the Attorney-General, it could be the consumer affairs minister.

I guess the good thing about having a racing minister and a person in the Office for Recreation and Sport whose sole focus is to deal with the racing codes is that we are there ready to pick up the phone. We have a good understanding of what they need and what their sports are all about. We have a close association but no direct control.

Mr WHETSTONE: Minister, have you been given, or have you sought, any advice on how within the racing industry we could enhance a training program for industry participants? I am not trying to stray away from page 1312 but the industry is looking at shortages of industry participants—trainers, strappers and the like—and the idea of having a TAFE training facility for overseas students who come to the state.

The Hon. L.W.K. BIGNELL: I thank the member again for the question. It is a really good point. We had a meeting last year with Frances Nelson and we talked about that because we probably have one of the best training facilities in Australia. I offered to Ms Nelson, as the chair of Thoroughbred Racing SA, that I would be happy to work with her through the various levels of government and the different departments to try to make it easier for overseas people to come down to Adelaide and do their training—as you say, as trainers, strappers, jockeys.

I think it would be a win-win situation. We would have more people out there to ride track work. We would obviously build some connections, particularly through the emerging racing countries like China where it is becoming increasingly important. We have always had a very strong relationship with Hong Kong and I think we could further develop that. I have not heard back from Thoroughbred Racing SA but we are willing to hop in and do that because it gives them another revenue source. All three codes of racing have found it increasingly difficult to match the stake money that is being provided interstate, and there is no point in just shelling out more money. If we can work with the industry to try to give them a revenue source of their own that they can continue to grow in a sustainable way, then that is something that I would definitely back in, as a punter.

Mr WHETSTONE: One final question before we move on, relating to employees in Volume 4, page 1313. The Department of Planning, Transport and Infrastructure paid remuneration to 125 employees in 2014 and there were 91 employees who received TVSPs in the reporting period. Can you provide a breakdown of the number of employees in the Office for Recreation and Sport and which pay brackets they fall into?

The Hon. L.W.K. BIGNELL: All up, including the South Australian Sports Institute (SASI), there are 74 staff. I do not have the breakdown of their different pay bands but I am happy to provide that to you if you so wish.

Mr WHETSTONE: Thank you.

The CHAIR: We are now going to another area, so we need to change advisers. Thank you to the advisers. I ask the tourism people to move in as quickly as possible.

Mr TRELOAR: I refer to Volume 5, page 1915, regarding Communication of Audit Matters. The Auditor-General communicated an issue to the CEO of the commission that the timeliness in documenting an approval for one procurement process was conducted under a tight time frame. Can the minister explain what that procurement was and why that particular procurement was conducted under a tighter time frame than usual?

The Hon. L.W.K. BIGNELL: I thank the member for Flinders for his question, and I acknowledge his great part of the state. What a tourism mecca it is! The matter related to the engagement of a supplier to facilitate payments to the South Australian Tourism Commission's suppliers in China. This procurement was undertaken within a tight time frame with the assistance of an in-country legal firm approved by the Crown Solicitor's Office.

Approvals were confirmed in minutes by the South Australian Tourism Commission's accredited purchasing unit rather than separate procurement documentation. Audit noted the tight time frame and unique circumstances associated with this procurement. In the 12 months since entering into this service agreement, fees have totalled less than $11,000.

Mr TRELOAR: I refer to Volume 5, page 1935, financial note 5, Employee benefits—expenses. I note that the number of executives on over $141,500 has increased from seven to 11. Can the minister explain what skills or expertise the commission has benefited from in having that increase?

The Hon. L.W.K. BIGNELL: I want to acknowledge the fantastic and strong skills that every employee in the South Australian Tourism Commission has. The increase is largely due to the payment of five TVSPs (targeted voluntary separation packages) in 2013-14, at a total value of $661,000, compared with just one in 2012-13, so it was people taking these packages. The value of 2012-13 was only $66,000, so it has increased from $66,000 to $661,000 in the space of a year because there were more separations. It is an increase of $595,000, which was funded by the Department of Treasury and Finance.

As a result, the following positions were abolished: campaign services manager, senior policy adviser, senior human resources consultant, destination development and international adviser, and business manager projects. The number of employees with remuneration greater than $138,000 has increased by four, compared with the previous year, from seven to 11. This increase is due to the six termination payments to non-executive staff. There were two fewer executives paid greater than $138,000 in 2013-14 than in 2012-13.

The remuneration of these employees is a private matter; however, the salary ranges of all executives are published in the annual report, which I tabled today. The remuneration of these employees reflects all costs of employment and includes salary and wages, termination payments, payment in lieu of leave, superannuation contributions, salary sacrifice benefits and fringe benefits.

Mr TRELOAR: I refer to Volume 5, page 1933, financial note 8. The commission spent $40,000 on consultants. Can the minister detail the services delivered by those consultants?

The Hon. L.W.K. BIGNELL: The expenditure on consultants, as you said, was $40,000, and the details were as follows, and they were $20,000 each: one was to Resolution Media Network Pty Ltd, and the purpose was for search engine optimisation assessment and strategy, and that was from June until August 2013, at a cost of $20,000; and the second one was KPMG, which was for development of strategy, policy and procedures for the digital revolution project, which was from April until May 2014 and, again, that cost was $20,000.

We won a big national award for our online presence. The South Australian Tourism Commission needs to be congratulated on its excellent online presence, not only for people who are planning trips to South Australia but also for those who are in our great state, so that they can go online and see the attractions and get involved in events when they get timely information.

Mr TRELOAR: I refer to Volume 5, page 1915. I refer to a comment made under Shared Services. It states:

Last year's Report made specific comment on the progress being taken by SSSA to remediate key control weaknesses raised in prior years for the systems and control environments, in order to achieve a satisfactory ongoing standard of control operation over financial transaction processing.

Can the minister give a report on how those weaknesses are being addressed?

The Hon. L.W.K. BIGNELL: I thank the member again for his question, but it is probably a question best directed to the minister with responsibility for Shared Services.

Mr TRELOAR: I refer to Volume 5, page 1917. Minister, total expenses increased by $1.9 million to $61.4 million in 2014. Significant factors contributing to this change are under four dot points. Most interestingly, there was an increase in advertising and promotion expenses of $3.4 million due mainly to increased consumer advertising. Can the minister give some detail around this increase in advertising and the benefits gained?

The Hon. L.W.K. BIGNELL: Certainly. It was a matter of timing. We had the Barossa ad, which cost $6 million, and it has won, I think, 11 international awards, including the best tourism commercial anywhere in the world. It won that in Cannes. We also had an ad to promote Adelaide and we launched that at the start of February this year. We did that to cash in on the fact that Adelaide had been named by Lonely Planet as one of the top 10 cities in the world.

Also, the timing was perfect in that we just had the Santos Tour Down Under the week before. We were about to have Mad March, with the Adelaide Cup and the festivals: the Fringe, the Adelaide Festival and WOMADelaide, and we of course had the unveiling of the brand-new Adelaide Oval, which was such a huge success. We had a good story to tell about Adelaide that we did not want to wait until 1 July and the new financial year, so we brought that advertising campaign forward by about five months. We brought money from this financial year into the previous financial year to make sure that we could get that into cinemas and onto television screens and actually get people talking about Adelaide.

We did a lot of research, some focus groups and surveys in the Eastern States and the good news was that they did not have an opinion of what Adelaide or South Australia was all about. They did not think we were really bad, but they did not think we were really good, so we had to go out there with a blank canvas and really promote what Adelaide is all about. I am happy to say that we have seen a big jump of about 7 per cent in the number of interstate visitors coming to Adelaide and South Australia this year, so that marketing is working. The most important thing we can do as a tourism commission and as a government is to spend as much money as we can on telling the rest of the country and the rest of the world who we are and what we are all about.

Progress reported; committee to sit again.

Mr GARDNER: Sir, I draw your attention to the state of the house.

A quorum having been formed:

PARLIAMENTARY BUSINESS
MEMBERS
GET INVOLVED
ABOUT PARLIAMENT
VISIT
LEGISLATIVE COUNCIL
HOUSE OF ASSEMBLY
CONTACT