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House of Assembly - Fifty-Third Parliament, First Session (53-1)
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Auditor-General's Report

Auditor-General's Report

In committee (resumed on motion).

The CHAIR: We now have the Minister for Regional Development and the Minister for Local Government. The member for Goyder is leading with the questions. What page are you looking at on local government?

Mr GRIFFITHS: I am looking at page 38 of the annual report. Under the heading 'Local government: a new role for the Auditor-General is underway', the report identifies that the changes that occurred to the Public Finance and Audit Act from 1 September 2013 involve the Auditor-General, potentially, in the process. I am aware that the Auditor has written to the Local Government Association and, I think, councils twice this year already. I am just wondering what involvement the Minister for Local Government has had, whether he has had feedback from the LGA on this and whether any issues have been identified as part of that initial consultation with them.

The Hon. G.G. BROCK: There have been no issues raised with me, to my knowledge. However, I understand that, at the time of finalising the annual report, staff at the Auditor-General's office were in the process of reviewing the documentation provided by the LGA and councils, and that the outcome of any future examination will be provided in a specific report to parliament in accordance with the act.

Mr GRIFFITHS: I appreciate the answer from the minister. Indeed, it has been not a contentious area, but the potential for the Auditor-General to have a stronger involvement with local government has been raised in some of the parliamentary committees in the past. The audit report identifies that the examination of the accounts, efficiency and economy, and/or the cost effectiveness of a council's activity is not necessarily in the purview of the Auditor-General but is provided by the individual auditors that are appointed by each council. I am just interested to see how that moves forward. It might be an area that the minister keeps a bit of an eye on just to see what occurs.

I will move on, though, and jump to page 1347 of Volume 4; I hope the minister is able to respond to this one. In this part of the report, which is under the planning, transport and infrastructure component, towards the bottom of page 1347 it identifies cash inflows: repayment of loans—local government, $240,000 for the year ended 30 June 2013 and $255,000 for the latest financial year. I am just interested in a breakdown of what that was for.

The Hon. G.G. BROCK: We will take that question on notice. We will get that back to you.

Mr GRIFFITHS: Still within the same volume at page 1358, again, this is an issue that relates to financial transactions. About an inch from the bottom of the text it refers to 'Transfer payments to local government: Councils'. For the latest year it is $10.856 million. I am interested in a breakdown of what that payment was for and, indeed, is it a consistent area of payment across all councils or is it to one council? Has the minister got some detail on that?

The Hon. G.G. BROCK: We do not have that information, but some of that money could be from other portfolios which deal with local government. Certainly, we will get all that information and a detailed breakdown for you.

Mr GRIFFITHS: I am trying to be a patient person and I understand it is very difficult to have a briefing paper that includes all possibilities. I suppose, from my perspective, I have looked at it via the key word search opportunities that exist on the internet now to identify what local government is, and that is a substantial amount of money, so I would have expected the detail to at least have been available in some way because I am referring specifically to a page and a payment that has been made.

We will move forward to page 1430, and I am seeking clarification. The minister would note that in the early part of the numbers included on the page there is a substantial payment, via the Local Government Grants Commission, of $167.4 million in the year ended June 2013 but nothing in the 2014 year payment. Equally, for the Outback Communities Authority it is $895,000 to 30 June 2013 and only $13,000 for the year ended 2014. My presumption is that reflects the transfer of responsibility from one department to another. I am just seeking confirmation of that.

The Hon. G.G. BROCK: Yes, it is a transfer to other facilities and agencies.

Mr GRIFFITHS: Thank you, minister, for confirming that. Do you have the detail available today for the Outback Communities Authority which, as I understand it, is one of the areas you are responsible for, and I appreciate the fact that your office recently provided a briefing to me on some aspects of it? I refer to the $13,000 in expenditure that occurred in the 2013-14 financial year.

I refer to the same line on page 1430, grants and subsidies—$13,000 is shown for the year ended 30 June 2014 for the Outback Communities Authority. I am interested in why there is zero in the Local Government Grants Commission but there is still some residual payment being made in the Outback Communities Authority.

The Hon. G.G. BROCK: I am advised that the $13,000 that you are talking about there was when it was in DPC, before it was transferred across to PIRSA.

Mr GRIFFITHS: I know that because it is under DPC. I am just interested because it is in the area of your responsibility, and I thought your briefing paper would include some detail on that.

The Hon. G.G. BROCK: I am advised that it is just for normal operations. We will double-check that and get back to you if it is not that, but we have been advised it is for normal operations.

Mr GRIFFITHS: I now turn to page 1506. Towards the very bottom of the page under Advances—this is in the Primary Industries and Resources section—I note towards the very bottom there is a $76,000 payment in the last financial year for local government grants and I am interested in what that was for.

The Hon. G.G. BROCK: In the figures here we have commonwealth, industry and state grants. We need to clarify that for the member, so we will need to get some more work done on that. I apologise to him.

Mr GRIFFITHS: Minister, this one is about the Local Government Finance Authority.

The CHAIR: Is this on page 1506?

Mr GRIFFITHS: No, it is page 1073, which is in Volume 3. Minister, we will talk about this one. It is at the very top of the page. I think we both from our past lives respect the work the Local Government Finance Authority does. It has been of wonderful service in providing good value loans and, indeed, good returns on investments that councils wish to undertake. I have noticed that, as part of this, the loan borrowings have increased and the deposits have dropped. I think the difference is about $122 million in comparison to previous years.

I am particularly interested in the figure of $3 million for guarantee fee and administration expenses. I do not ask you this question as any form of trap but, prior to the election, I had a discussion at the request of the LGFA because there was some concern about what the future guarantee costs might be for local government borrowings, which have the guarantee of the state government. I am just trying to work out, following those six or seven months since then, if there have been some submissions lodged to you, and if some issues have been sorted out there in an effort to try to keep borrowings as low as possible as a cost to local government; that is the reason for the question.

The Hon. G.G. BROCK: The Local Government Finance Authority is not under my responsibility; it is under the Minister for Finance, the Hon. Tom Koutsantonis. I have no formal responsibility for the Local Government Finance Authority Act or the Local Government Finance Authority. To my knowledge, I have not had any correspondence from the LGA or the association, but I do believe that there may be some discussions with the LGA, in conjunction with the Treasurer.

Mr GRIFFITHS: Chair, I will accept the answer. I see it as a subsidiary and it is included following the local government stuff, but we will move on. I appreciate the fact that the minister would tell me if he knew. I admit that this question does not necessarily have a line reference, but it is an important issue. It relates to one of the matters that is to be considered as part of the Local Government Association AGM agenda, which is meant to be considered tomorrow morning, and some legal advice that the Local Government Association has had about the transfer of Housing Trust properties through to the NGOs predominantly.

The minister would appreciate the fact that there had been, I think via minister Piccolo, the member for Light, a commitment given when he was a minister that, when transfers are to occur, there would be something included in the contract for the transfer that would ensure that local government was not disadvantaged financially by the rates subsidies that had to be provided. As I understand it, when local government becomes aware—not necessarily when an application arises—of the fact that a complying group now has control of that property, they are eligible for a 75 per cent subsidy. I am interested to get an update from the minister on what has occurred in negotiations about that.

The Hon. G.G. BROCK: Yes, the LGA has raised this matter with me, and I have also raised it with the relevant people. Minister Bettison has asked my officers to work with her office to get more clarity about the whole thing. This is regarding the mandatory rebate?

Mr GRIFFITHS: Yes, 75 per cent.

The Hon. G.G. BROCK: Yes, 75 per cent—to look at that and to get some more information with a view to taking that as part of the comprehensive review of the Local Government Act, which we will be working on towards the end of this year and early next year. I understand the effect on local councils by the transfer from Housing SA to NGOs.

Mr GRIFFITHS: There was a lot of concern during the early stages of this. I certainly have a recollection of the City of Marion talking about the fact that, if all of their Housing Trust properties were to transfer, it would be a loss of $1 million in rate revenue too. Minister, if we can go to regional development now.

I refer to page 1444, particularly the subtitle at the very bottom of the page which talks about corporate governance. Some may contend this is a not linked question, but in previous estimates and auditor-generals sessions I have asked questions about where grant obligations have not necessarily been met. It has been as high as 17 in the past (in most recent years) and then has gradually reduced. Is the minister able to confirm that all grant obligations made to any type of body, that the minister has control over grants and those obligations have actually been met for the period ending 30 June 2014?

The Hon. G.G. BROCK: Generally, all grant payments are made in arrears; we do not make any in advance. Payment is on production of actual expenses by way of invoice. They are actively managed by SAFA. So, we certainly do pay them in arrears and on receipt of the relevant invoice.

Mr GRIFFITHS: Thank you. I appreciate the answer from the minister. Given that the regional development section of primary industries and regions is linked together but it is not actually identified within the audit report, are you able to confirm to me what page it is on and what the total expenditure and income area is, because I would love to see that?

The CHAIR: What page?

Mr GRIFFITHS: I am sort of flowing on from page 1445.

The CHAIR: 1425?

Mr GRIFFITHS: No; it starts on 1445. There are expenditures and then there are incomes for the area.

The Hon. G.G. BROCK: We have three programs that you are talking about there: agriculture and food, forestry and regional development. If you go to page 1453, that is the page number, the activities of regional development are under No. 3. There are Nos 1, 2, 3 on the top and regional development is No. 3.

Mr GRIFFITHS: Most enlightening. I appreciate that. I will write that down. Minister, given that you pointed that out for me, are you able to say that within that expenditure and income area it identifies the amount of dollars that are spent by your department on consultants?

The Hon. G.G. BROCK: I am advised that, on page 1468, the whole lot is under PIRSA, so it may not be under my direct delegation. However, no money has been expended for consultants, I am advised.

Mr GRIFFITHS: I am seeking confirmation. It talks about some underspends that were occurring up until 30 June 2014 as to the Upper Spencer Gulf, the Riverland Futures and that sort of stuff. Can the minister confirm for the public record that those funds have now been fully expended?

The CHAIR: What page are we on, member for Goyder, with the underspends?

Mr GRIFFITHS: I think it is page 1469.

The CHAIR: Page 1469, and where are we looking? Just for the table, we just want to keep up with you.

Mr GRIFFITHS: There are lines there for expenditure, Chair, but the words that talked about an underspend for that financial year are in different part but, for the life of me, I cannot remember where it is.

The CHAIR: So there seems to be an underspend somewhere but we are not sure where. Do you want to take that on notice?

The Hon. G.G. BROCK: Expenditure on regional grant programs, including the Riverland Sustainable Futures Fund, the Upper Spencer Gulf, Outback Enterprise Zone Fund and the contribution to Regional Development Australia, has varied between the 2012-13 and 2013-14 financial years based on the approved arrangements in place with various grant recipients.

The Riverland Sustainable Futures Fund paid out grants of $4.653 million in 2013-14 compared with $6.890 million in 2012-13. It was an increase of approximately $2.2 million. The $20 million fund is fully committed, with the remaining funds for approximately $4 million being allocated to seven projects across 2014-15 and 2015-16.

The Upper Spencer Gulf and Outback Enterprise Zone Fund paid out grants of $0.98 million in 2013-14 compared with $2.475 million in 2012-13. That was a decrease of approximately $1.5 million. The $4 million fund is fully committed with the remaining funds for about $0.3 million being allocated to two projects across 2014-15 and 2015-16.

The CHAIR: I thank the advisers for their time.

Progress reported; committee to sit again.

Sitting extended beyond 18:00 on motion of Hon. G.G. Brock.

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